14/06/2022 08:59

First Up

Global stocks have experienced ever-increasing volatility through 2022 and while its easy to point the finger of blame directly at surging bond yields we believe the removal of liquidity is more specifically the issue although by definition they go hand in hand. What matters is where to from here so MM and our subscribers can add value (alpha) to our portfolios while both fear and opportunity increase by the week. The obvious place to...

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09/05/2022 09:05

Chart of the Week

High yield / junk bonds are breaking down as corporates find it increasingly expensive to borrow money whether for buybacks which helped fuel the post GFC stock markets rally or simple old fashioned growth, either way its not good news for stocks. The Fed announced last week the start of QT3 (quantitative tightening) history tells us this will not be bullish for stocks i.e. remove liquidity...

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30/03/2022 09:26

iShares High Yield ETF (HYG US) $US81.30

The damage to high yield (junk) bonds as a pure investment has been meaningful, the iShares $14bn US high yield corporate bond ETF has fallen over 8% already this year, not a great return for an investment asset class often deemed to be more conservative than stocks. The simple trouble is when interest rates rise bonds fall because their fixed yield becomes comparatively less attractive than what’s on offer from safer vehicles plus if liquidity is drying up it’s the riskier end of town that gets avoided first.

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13/10/2021 09:32

iShares High Yield Bond ETF (HYG)

High yield bonds have started to slip of late as defaults wash threw the Chinese property developers, we are more mindful than scarred at this stage but we do believe this is a clear indicator that careful positioning will be required around equities and sector exposure through 2022.

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21/09/2021 09:36

High Yield (junk) Bonds

The weight of money globally sits in the bond market and it’s often described as the smart money while equities get tarred with the other side of that brush. While there are a number of concerns playing out in equity markets including seasonal weakness, the potential for a major Chinese property developer to collapse and another one this morning that gets...

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13/09/2021 08:54

First Up

The ASX200 and global equities have rallied strongly since their early 2020 COVID meltdown with virtually all major indices posting fresh all-time highs in recent weeks but there might be a new canary in the coal mine, the main question being will it be around for just a few weeks, or much longer. Firstly lets reiterate 3 of the main reasons stocks have “wobbled” in recent sessions:

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