Credit Market Weakness: Are We Ignoring the Signs?

The video discusses recent trends in bond markets, highlighting Japan's potential fiscal stimulus and its impact on sovereign bonds. It examines corporate bond saturation, with a focus on Microsoft's recent $20 billion bond issuance. The analysis includes Microsoft's bond yield curve and market demand. The video also explores the potential for global fiscal stimulus and its effects on yield curves. Finally, it reviews credit market trends and their implications for equity markets, noting early signs of weakness in credit spreads.

What is one reason for the rising yields in Japan?

• Microsoft's bond issuance

• Decline in global oil prices

• Japan's plan to issue 40-year debt

• Increased corporate bond issuance

What was the approximate value of bonds Microsoft sold recently?

• $25 billion

• $10 billion

• $15 billion

• $20 billion

What does a lack of follow-through in bond trading indicate?

• Market saturation

• Increased fiscal stimulus

• Rising oil prices

• High demand for new issues

Which country is likely to engage in fiscal stimulus by issuing long-term debt?

• Australia

• United States

• Japan

• Germany

What is a sign of early weakness in the credit market?

• Widening credit spreads

• Decreasing investment grade credit spreads

• Increasing high yield space

• Rising energy sector prices