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ISHARES TRUST IBOXX USD INVESTMENT GRADE CORP BOND ETFISHARES TRUST IBOXX USD INVESTMENT GRADE CORP BOND ETFISHARES TRUST IBOXX USD INVESTMENT GRADE CORP BOND ETF

ISHARES TRUST IBOXX USD INVESTMENT GRADE CORP BOND ETF

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LQD trade ideas

LQD, Potential Inflection Point Is about to get TestedIn my previous LQD study I outlined a possibility to use the LQD as a leading indicator for equities. Looking at the daily chart a few weeks later we can see that the price is within a well defined wedge. Perhaps, the next week will bring a test of the wedge boundary. If there is an impulse breakdown it would be worth watching its effect on the direction of equities and perhaps to be cautious about investing in equities at that time. Let’s see if the LQD provides any hint. Starting next week a bunch of mega cap tech companies will be reporting. Each of them is a market mover. Considering that the Nasdaq is at all time high the techs earnings will be under the investors microscope. 04/20/2019
AMEX:LQD
by SviCapital
Corp Credit SpreadsGetting nervous yet? Spreads contract, equities typically run higher and vice-versa. Well, spreads have been expanding and yet equities have surged higher. Small caps have not participated like the SP500. Perhaps one is lying? "Long" spreads expanding. Some reading from the NBER National Bureau of Economic Research: Credit Market Shocks and Economic Fluctuations: Evidence from Corporate Bond and Stock Markets To identify disruptions in credit markets, research on the role of asset prices in economic fluctuations has focused on the information content of various corporate credit spreads. We re-examine this evidence using a broad array of credit spreads constructed directly from the secondary bond prices on outstanding senior unsecured debt issued by a large panel of nonfinancial firms. An advantage of our "ground-up'' approach is that we are able to construct matched portfolios of equity returns, which allows us to examine the information content of bond spreads that is orthogonal to the information contained in stock prices of the same set of firms, as well as in macroeconomic variables measuring economic activity, inflation, interest rates, and other financial indicators. Our portfolio-based bond spreads contain substantial predictive power for economic activity and outperform---especially at longer horizons---standard default-risk indicators. Much of the predictive power of bond spreads for economic activity is embedded in securities issued by intermediate-risk rather than high-risk firms. According to impulse responses from a structural factor-augmented vector autoregression, unexpected increases in bond spreads cause large and persistent contractions in economic activity. Indeed, shocks emanating from the corporate bond market account for more than 30 percent of the forecast error variance in economic activity at the two- to four-year horizon. Overall, our results imply that credit market shocks have contributed significantly to U.S. economic fluctuations during the 1990--2008 period.
AMEX:LQDLong
by kilo1romeo
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