It was another crazy day in the markets with volatility and whispers rampant; we have become very event and headline-driven.
The morning started out with rumors of the demise of a Middle Eastern monarch followed by a sell-off in both stocks and credit.
European peripherals joined the party with Portuguese 10 year spreads blowing out wider and taking all peripherals wider, only to come back in off the wide prints.
By the end of the day, stocks had closed flat but the Mubarak show (starring Johnny Mubarak) made a comeback with the Egyptian President announcing plans to stay on through the fall.
Good luck.
What players need to realize is that with or without these headlines, corporate credit continues to trade firm and bonds are finding bids.
The IG (investment grade) CDS (credit default swap) index is trading wide to fair value (the underlying credits).
Barring more headlines, the index can rally with ease, especially with many of the longs having been shaken out over the past couple of trading sessions.
Lost amidst the headlines, Federal Reserve Governor Kevin Warsh announced his resignation; Warsh was an opponent of printing money last fall.
PetroChina is to pay $5.4 billion for a 50% stake in Canadian Encana's shale natural gas assets in British Columbia.
Rio Tinto extended an almost $4 billion takeover bid for Mozambique-focused coal miner Riversdale.
University of Michigan confidence numbers are out tomorrow.
