Credit weakness in the market

The ten year treasury nudging 2% has caused a pause in credit, especially with the lower coupons. Not a fundamental event but sorta like waking up on the last two days of a great vacation and knowing it is almost over and time to pack the bags. The reason that it is not fundamental is because we have QE intact and this will continue to inflate the markets. But in the meantime, this pause in a tired market will cause ETF sellers to line up their withdrawals and cause short-term, deepening sales — all of which are good for opportunistic buyers who have bought into the QE-supported economic strength.

Advertisements

Tagged: , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: