After a mediocre 3Y, and a strong 10Y auction in the last two days, the Treasury concluded its refunding on the right foot - if with some blemishes - selling $15 billion in 30Y bonds at a 2.801% yield, stopping through the WI 2.802% by the smallest possible margin, and below last month's 2.870%.
Less than a week after Venezuela shocked the world by announcing it would proceed to restructure its massive external debt, even as it was within the grace period on hundreds of millions in unpaid interest expense, on Thursday the socialist nation confirmed it has never been closer to an official default after Reuters reported that Venezuela's state oil-firm company, PDVSA, has not made a debt payments to India’s top oil producer ONGC for six months, and has previously used a Russian state-owned bank and another Indian energy company as intermediaries to make payments.
Confirming reports from earlier this week that the Senate GOP tax plan would delay the corporate tax cut for (at least) one year, a move that would strip the proposed tax reform of its most potent benefit, moments ago the Wapo reported that in a few hours, Senate Republicans will propose delaying a cut in the corporate tax rate from 35 percent to 20 percent until 2019.
After a wave of GOP defections in recent days and waffling on timing, Goldman's economics team apparently still sees a 65% chance of a tax reform bill being enacted by "early 2018," but warns that the final bill may look nothing like the one recently proposed by the House.
Sell the news? Stocks are slumping (following Japan's overnight volatility) as traders await tax-cut legislation from the House Ways and Means Committee (and The Senate will also release its own version).
High-Tax companies are underperforming...
And Junk bonds just hit the lowest since March...