Raising Rates Into Defaults
January 12, 2016
We have been stating for the past six months that risk almost always starts at the “fringe” and works its way to the quality. The troubles in the energy patch are not isolated. The defaults will eventually work their way across multiple industry groups, as the excess in credit begins to reset. Defaults on speculative debt are nothing new. However, there is […]
The QE Experiment: What Now?
October 20, 2014
Just how much influence has QE had on financial markets? The chart below illustrates the impact of QE on the price of the S&P 500 Index since the long-term bond purchasing program began in November 2010. The results are sobering. Since beginning QE2 in November of 2010, the S&P 500 Index has advanced more than 55% (excluding dividends). If one […]
When April Gets Interesting
April 24, 2014
Should we be concerned about the recent declines or is it as simple as the popular April 15th Tax selling theory? We did a little digging into the past to see if we can confirm the tax selling theory. Is April the “Most Interesting Month of the Year?” If Dos Equis actor Jonathan Goldsmith is “The Most Interesting Man in De […]
Clear Skies
October 23, 2013
We see several catalysts that may facilitate further advances for equities and especially corporate high yield bonds into the end of the year. Low Down on the Shutdown. First the bad news. The U.S government is a large contributor to the economy and the shutdown will certainly have a negative impact on fourth quarter growth. Analysts are already downgrading fourth […]
The Smart Money
May 30, 2013
Smart Money There are a number of structural reasons why we call movements in the High Yield Bond asset class the “Smart Money”. A key reason is liquidity. High Yield Bonds are much less liquid than stocks. Bonds are still traded over the counter, dealer to dealer based on a wide variety of inputs such as inventory, credit risk and […]
Here We Go Again
March 28, 2013
As we approach the end of the first quarter, stocks have once again delivered strong first quarter performance while negative headlines from Europe are reemerging. Is the stage is set for another April/May decline? Here is what we are watching at Anchor Capital. The Dow Jones Industrial Average is reaching new all time highs and media channels are counting down […]