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Corporate Credit: Investment Grade Debt Risk Climbing

US

Investment-grade corporate credit risk extending highs at midday as stocks breach support. SPX eminis currently -55.50 (-1.18%) at 4428 well - through 50-day EMA of 4456.43, deeper pullback towards 4425.96 initially, a Fibonacci retracement. Round number of 4400.0 next key support.

  • Ongoing focus on latest earnings cycle that kicks off next week with financials make up the bulk of releases. JP Morgan and BlackRock are due to set the tone on Wednesday, before Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo follow.
  • Investment grade risk measured by Markit's CDXIG5 index currently +2.265 to 72.864 vs. 73.157 high; CDXHY5 high yield index mildly lower at 103.798 (-.475).
  • Outperforming credit sectors (tighter or least wide): Materials sector (+1.1) outpacing Utilities and Industrials (+1.6) with gas and electric service provider debt narrowing.
  • Lagging sectors (wider or least narrow): Energy (+3.1) underperforming Financials. Technology and Communication sector names each appr +2.6-2.8.

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