Need to Know: Here's the pocket of the market flashing an over-leveraged warning
It’s been a banner year for stocks already. In fact, if we could just shut the whole thing down for the next 10 months, we’d be looking at double-digits returns on the S&P 500 SPX, +0.69% for 2019.Alas, it doesn’t work that way, and, needless to say, there are plenty of things that could go sideways before the bell rings in 2020. One of the risks could come from a familiar source: leveraged loans.
There’s currently $700 billion in outstanding CLOs around the world right now, with annual new issues of more than $100 billion, similar to what we saw in the infamous subprime CDOs in 2008. Looks like that “blindness to risks” is about to spill over into Monday’s session, as stocks are setting up for a nice start to the week.
Elon Musk fired up Tesla TSLA, -7.84% fans on Sunday afternoon when he tweeted about an upcoming unveiling of the new Model Y. In subsequent tweets, he said: “Model Y, being an SUV, is about 10% bigger than Model 3, so will cost about 10% more & have slightly less range for same battery,” and that “Detailed specs & pricing will be provided, as well as test rides in Y.”
Yes, the list is completely dominated by Chinese funds, led by this ETF CNXT, +1.84% . Commodities also fared pretty well.
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