Monday, December 17, 2018

Serious Development: No Junk Bonds Sales in December So Far

It is getting serious out there.

US credit markets are grinding to a halt with fund managers refusing to bankroll buyouts and investors shunning high-yield bond sales as rising interest rates and market volatility weigh on sentiment, reports The Financial Times.

Not a single company has borrowed money through the $1.2tn US high-yield corporate bond market this month. If that drought persists, it would be the first month since November 2008 that not a single high-yield bond priced in the market, according to data providers Informa and Dealogic.

In fact, in the leveraged loan market, two transactions were postponed last week after Barclays, Deutsche Bank, UBS and Wells Fargo failed to find buyers for the debt packages.

Although many economists forecast a possible recession in 2020, there is one group that is a closer to the action that I have identified in the EPJ Daily Alert that is warning that a recession could hit in 2019. Indeed, in the EPJ Daily Alert, I have told readers there is one data point I am watching very closely that could cause me very early in the year to officially forecast a 2019 recession.


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