Displaying items by tag: bear market
The Market’s New Systemic Risk
(New York)
Any seasoned market veteran will tell you that today’s hottest thing might very well turn into the epicenter of tomorrow’s crisis. Tech stocks led to the Dotcom crash, structured credit led to the Financial Crisis. Now ask yourself, what is the hottest product of the moment? The answer is simple: ESG stocks. ESG is nebulous as an asset class since it crosses many boundaries, but in reality, a lot of the new ESG AUM has flowed directly into large cap tech stocks. This means that a lot of the buying going on in large cap tech is just de facto ESG buying.
FINSUM: ESG is a surging category and a lot of Dollars are flowing in. Since the term and its actual meaning are still vague, a lot of the money flows into tech, which is almost universally seen as ESG friendly. When might the music stop?
High Yield Bonds are Flashing Big Warning Signs
(New York)
By any reasonable measure, high yield bond markets look very scary right now. The way that yields have plummeted, the way that covenants have weakened, and the general ease of accessing credit are all reminiscent of 2005. Spreads over Treasuries have fallen to just 300 bp. A year ago they were at 600 bp. Companies have successfully weakened investor protections in new issues without penalty, and crucially, default rates will likely fall below 1% this year. The picture was the same in 2005.
FINSUM: By the Crisis, default rates hit 14% and high yield investors got killed. However, a big correction in high yield would take a catalyst. Is it a sooner-than-expected Fed pullback?
Goldman Sachs Says the Bull Run Is Over
(New York)
The post-pandemic run has been marked by staggeringly low volatility and all-time highs in both the S&P 500 and Dow Jones. However…see the full story on our partner Magnifi’s site.
JP Morgan Warns of Big Tech Correction
(New York)
For anyone who has enjoyed the big rally in tech shares after the rough February through March period, JP Morgan has bad news…see the full story on our partner Magnifi’s site
Pay Attention to This Big Bear Market Warning Sign
(New York)
The stock market has been on one of the most historic recoveries in market history, but…see the full story on our partner Magnifi’s site