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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: Killswitch who wrote (14691)	10/1/2002 9:21:24 AM
From: Killswitch	Read Replies (1) \| Respond to of 19219

"Brian Reynolds Bond stuff 10/01/02 08:23 AM EDT Corporate spreads continued to widen yesterday. Investment-grade spreads had been flat for a couple of days, but resumed their upward path yesterday and are now only 10-15bp away from their cyclical wides of this summer. High-yield passed this summer's wides last week, and is now only 20-30bp away from all-time wides. The weak Chicago PMI started a lot of talk about an intermeeting Fed ease (Friday if bad employment numbers, or next Fri in front of the long weekend if the corporate market deteriorates enough to force the Fed's hand). Spreads are back to or beyond levels that I pointed out would warrant a Fed ease this summer. However, the issue remains not whether they would do it, but how the bond market would react to it. I've written over the last year and a half how, despite 475bp in cuts in short-term rates, both the money and bond markets have clamped down on companies, especially the aggressive growers and spenders from the last decade. So far the Fed's easing has reached those sectors that need it the least (autos, housing) but hasn't impacted the sectors that are struggling. I'll have a more comprehensive look at spreads in an IR today."