MarketSaga

Saga of Financial Markets

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Last updateSat, 29 Jul 2017 12am

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What is so unique about hedge funds?

Apart from the fact that hedge funds could leverage and short sell the stock, one of key differentiation between hedge funds vs mutual funds would be their concentrated "bet" - hedge fund returns depend on the performance of a few key stocks. 

Read more: What is so unique about hedge funds?

Defaults is spreading outside commodities

The latest research from Deutsche Bank AG found that there are already signs of contagion in junk-rated debt outside of the commodities space, as evidence that the defaults of Quicksilver Inc, American Apparel LLC and Aeropostale Inc, which are from the retail sector.

Read more: Defaults is spreading outside commodities

Nifty Nine is driving US Markets

The return generated by US bonds and equities were flat for 2015.  It is the 2nd worst collective 12 months since 1995 - outstripped only by the disaster year of 2008.  On the other hand, "Nifity Nine" - Facebook, Amazon, Netflix, Google, Microsoft, Salesforce, eBay, Starbucks and Priceline beat the rest of the US market by more than 60%!

Read more: Nifty Nine is driving US Markets

Significant New Wave of High Yield Issuance Coming

“We expect a significant wave of new issuance in late 2016 and 2017, as companies begin to address their upcoming maturities,” said Tiina Siilaberg, a Moody’s senior analyst. “However, a range of macroeconomic factors will make it more difficult for lower-rated companies to tap the debt capital markets in order to refinance their debt obligations.”

Those factors include rising interest rates, the widening of spreads over Treasurys, the slowdown in China and oil-price volatility. At the same time, a stricter set of rules on leveraged lending that caps debt levels will also weigh on lower-rated companies.

A record $947 billion of U.S. high-yield, or “junk,” debt, is scheduled to mature in the next five years, and some issuers may struggle to refinance it, Moody’s Investors Service warned on 2016-02-16.

Of that total, $400 billion is set to come due in 2020, the highest amount of rated debt to mature in a single year in the history of credit markets, Moody’s said in a new report.

Reference:

  1. MarketWatch, Ciara Linnane, 2016-02-16, "Junk-bond Market Facing Record Refinancing Cliff:  Moody's"

 

金融风暴正重现

截止目前,全球27个主要国家的股市已经经历了两位数的下跌。这是一个真实发生的全球现象。我们看到股市崩溃发生在亚洲,欧洲,南美洲,非洲和中东。但是因为美国股市较最高点的跌幅不到1000点,因此大多数美国人认为一切都没问题。是这样吗?

Read more: 金融风暴正重现

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