Corporates: All Craft Retreat!

Corporate spreads weak again today. Heard that J.P. Morgan’s new 5-year was 20bps wider than issue, American Express 10ish weaker on the break, InBev weaker again. The new Simon Property is 25 weaker today.

On the positive side, it sounds like the new Wal*Mart bonds did OK, came at 130, now 10ish tighter.

Worth noting, from a macro perspective, new issue buyers are a fickle bunch. If they have bad experiences with one sector or name, the tend to stay away in the future. So its important that these new financial issues perform well or it may become difficult for future issuers. So far, even though AXP and JPM didn’t do that great, a lot of the other issues are still mildly tighter (BAC, GECC), but its worth watching.

Weakness in the credit market makes you scratch your head at how well stocks are doing today. Smells like options expiry BS to me. I covered part of my S&P 500 short yesterday, added a short of JNK. Might add back to my S&P short if we rise any more. I like 875 as a target.

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