Bloomberg Market Wrap 11/14: SKEW Index, Yield Curve, EM Debt

The video discusses market volatility indicators like the VIX and skew index, highlighting their roles in assessing market conditions. It also covers the yield curve's steepening as a potential recession signal, referencing historical analysis by Cam Harvey. Lastly, it explores a strategy for investing in emerging market debt, emphasizing the CDS cash bond basis and its benefits in high-yielding countries.

What does a low VIX and a rising skew index indicate about market conditions?

• Potential for increased market volatility

• Investors are confident in the market

• Stable market with low volatility

• Market is at a low point

What does the re-steepening of the yield curve suggest about the economy?

• A potential economic downturn

• Increased inflation risk

• An improving economic outlook

• Stable economic conditions

Which part of the yield curve is considered a recession signal according to Duke Professor Cam Harvey?

• Ten-year and thirty-year yield spread

• One-year and two-year yield spread

• Two-year and ten-year yield spread

• Three-month and five-year yield spread

What is the advantage of owning long bonds with default protection in emerging markets?

• Lower yield compared to US Treasurys

• Higher interest rate risk

• Reduced default risk with positive spread

• Increased currency risk

Which countries are highlighted as having high-yielding opportunities in emerging market debt?

• Australia, New Zealand, Singapore

• United States, Canada, Germany

• Brazil, Mexico, Russia, Indonesia, South Africa

• China, Japan, India