VIX Futures Climb, Treasury Yields Hit Multi-Century Lows, and Are High-Yield Investors Poised to Get Hit?
September 25, 2020 | FIRESIDE CHARTS
While some employers are rehiring and the total number of people receiving unemployment benefits has ticked down, weekly new claims have yet to fall below 1 million since the onset of the pandemic. And as VIX futures climb on election nerves and news that the DOJ is seeking to weaken legal immunity for tech giants like Facebook and Google, tech remains positive month-to-date—even after recent losses. Finally, as yields creep ever lower to hit multi-century lows, junk bond sales have gone through the roof and set new records. Will investors get crushed by an approaching wave of corporate defaults that’s projected to surpass 2009?
1. New unemployment claims remain well over 1 million/week. As some jobs return, the Covid crisis is claiming others…
Source: The Daily Shot, from 9/25/20
2. Markets like to climb “a wall of worry” but they do not like uncertainty. Mega-tech anti-trust and possible removal of legal immunity are weighing on the markets. The risk is showing up in the futures market:
Source: The Daily Shot, from 9/24/20
3. Despite the FAANG+ stocks taking it on the chin this month, tech is still the only positive sector month to date…
Source: The Daily Shot, from 9/24/20
4. Stocks are not the only asset class to correct this month. In times of duress, all risk assets tend to correlate towards 1…they do the same thing at the same time.
Source: The Daily Shot, from 9/25/20
5. We were wondering…
Source: The Daily Shot, from 9/25/20
6. Most investors and advisors have only known a secular decline in interest rates. That game is over! What will you do now?
Source: Deutsche Bank Research, from 9/25/20
7. Are inflation expectations showing up in TIPS purchases?
Source: Bloomberg, LP 2020 Arbor Research & Trading, from 9/24/20
8. Is the desperate search for yield leading the lambs to slaughter?
Source: The Daily Shot, from 9/25/20
9. Why junk bonds may be in trouble…
Source: The Daily Shot, from 9/25/20
10. How will the second Covid wave effect Europe’s manufacturing recovery and expansion?
Source: The Daily Shot, from 9/23/20
11. Another great print here at home…with the same concern as Europe…
Source: The Daily Shot, from 9/25/20
12. But is the renewed Covid increase in the heartland beginning to show in the regional Fed data?
Source: The Daily Shot, from 9/25/20
13. The markets like power-sharing for it gives a balance of power. There will likely be a reaction if the House, Senate and White House are all controlled by one party
Source: The Daily Shot, from 9/24/20
14. Please forget politics…EVERYONE in Washington needs to focus on balancing the budget.
Source: University of Pennsylvania, Goldman Sachs Global Investment Research, from 9/24/20
15. One issue Covid has helped alleviate:
Source: The Daily Shot, from 9/24/20
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.