Junk Contagion Spreads: Investment Grade Bonds Plunge To 2-Year Lows, 10Y Liquidity Implodes, CLOs Next
Just as we warned, the collapse of the high-yield market has spread contagiously to the investment grade market as selling begets selling and redemptions need to be met from what you can sell, not what you need to sell (but can't). LQD (the investment-grade bond ETF) is getting hammered today, breaking to its lowest in almost 2 years.
As Europe closed, HYG managed to stabilize but the selling accelerated in LQD (the investment-grade bond ETF)...
Cracking LQD below recent lows to 2-year lows...