Goldman: Stocks May Be Hearing Credit Warning Bell

Strategists at Goldman Sachs say that U.S. investment-grade debt has trailed equities for a month and has been “behaving in a way that portended the last big equity shakeup,” according to a recent article in Bloomberg. Similar to earlier in the year, credit has trailed equity (when measured relative to volatility) while tech stocks have set records. In a recent note, the strategists wrote, “In early January, modest widening in credit contrasted sharply with a rapid… Read More

Bill Gross on Weak Credit: Do Not Pass Go

It might sound like an oversimplification to discuss the current state of the credit markets in terms of a Monopoly game, but that’s exactly what Janus fund manager William Gross does in a recent Barron’s article. In particular, Gross compares a player’s passing of “Go” and collection of $200 as representing “new credit that is responsible for the ongoing health of our finance-based economy.” Without it, he argues, “economic growth moves in reverse and individual… Read More