HYG

[Pascal]

nice call on the usd/jpy; certainly some algos were triggered this evening and subsequent unwinding of carry trades will surely follow

concomitant with your continued scrutiny of xle and my vigilance of hy credit markets is the fact that one of the by- products of the grab for yield, has been the ability of lower rated oil companies to raise capital in the debt markets. energy now accounts for nearly 16% of the junk bond market and is the 2nd largest component of the high yield market. a continued rout in oil prices might have an undesirable effect on indebted oil companies' ability to repay their debt.

Interesting! It is maybe the reason why XLE has been outperforming XOP in the past weeks.
Investors are not looking for growth in the energy sector. They pay more attention to risk.


Pascal