(New York)

The stock market has been absolutely killed lately, but you wouldn’t know it from looking at bonds. Several high yield indexes have barely budged, despite the big worries over inflation and rates. Why? Aside from some high yield bond mechanics which make them less rate-sensitive, the answer is that investors are very excited about the sector. The market is anticipating a big wave of credit upgrades in the next year, and all investors in the space are trying to buy up the winners (who will jump in value when upgraded).

FINSUM: Earnings are doing well and there is a lot of investor demand for new high yield debt. Junk bonds look like they have a great runway for the rest of the year.

(New York)

May 12th was one of the key market moments of 2021. All eyes were on new inflation data that would make or break the market. The result was a definitive “break”. Inflation came in hot, with the reading measuring 4.2%, well over already high expectations of 3.6%. Markets took a pounding, with the Nasdaq leading the day’s losses in a 2.7% fall. The Dow and the S&P 500 also fell sharply.

FINSUM: We are now in the middle of another market tantrum. It is critical to ask oneself why inflation is so troubling. The reason the market is losing is because of higher rates’ effect on tech stock valuations, but even more importantly, the timeline for the Fed’s taper. But if you can put that aside, what is actually happening is that economy is doing well, and earnings look likely to be great. We think investors should just ride out the storm.

(San Francisco)

The Fed has continued to reiterate low rate accommodations…see the full story on our partner Magnifi’s site

(Houston)

Oil prices pushed up to $65 a barrel early in the week. Most investors…see the full story on our partner Magnifi’s site

(Beijing)

China is a growing region that is at the forefront of everyone’s minds, but many investors don’t know how to capitalize…see the full story on our partner Magnifi’s site