Weekly market update

News this past week

  • Euro falls as dollar strengthens
  • Turkey downs Russian jet
  • European PMIs surprise on the upside
  • Chinese equities tumble
  • Japan sees mixed inflation prints

James Klempster, CFA shares his view:

Over the past month there has been a reasonable amount of commentary on the price action in High Yield (HY) markets.  This has centered on the dislocation in performance between the US HY market and that of its equities.  HY bonds are issued by the lowest rated businesses in an economy.  These companies are generally a relatively high credit risk and the debt is sensitive to the short term performance of the individual company, whilst also being buffeted by the prevailing economic conditions.  For HY bonds a difficult trading period, whether due to company specific factors or due to broader economic malaise, could impact the ability of the issuer to repay the debt.

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