Corporations are funneling as much debt as they can into the market. We know what direction they’re leaning on interest rates. From Wolf Richter, at wolfstreet.com:
The scenario that corporations have been feverishly preparing for over the past few years took another step forward on Friday with the release of “robust” jobs data.
It triggered a sell-off in US stocks. Treasuries plunged, and yields jumped, with the 10-year yield reaching 2.24%, up 13 basis points for the day, and up 60 basis points from the low at the beginning of February.
That the US economy gained 295,000 jobs in February on a seasonally adjusted basis, according to the Bureau of Labor Statistics, blew past economists’ expectations. As these kinds of reports pile up, they’ll nudge the Fed to begin raising interest rates by mid-year. The Fed already abandoned QE though Wall Street had hyped the last round as “QE Infinity.” The zero-interest-rate policy would be next; that’s what the ultimate insiders, the decision makers in corporate America, are preparing for. For them, it means the free money, or nearly free money, is going to get more expensive.
They weren’t surprised by the jobs report, unlike the markets. They expected a blowout that would confirm their suspicions that the Fed would begin raising rates in a few months. They’ve been preparing for it by creating the maximum hype about the persistence of ludicrously low yields while simultaneously selling the maximum amount in debt to Fed-blinded investors before it all blows up.
http://wolfstreet.com/2015/03/08/heres-what-corporate-america-screams-about-bonds-sell/
To continue reading: A “Crush” of Bond Sales
