Weekly Commentary: Last Gasp

2025-11-15 08:45:42 ET

Let's start with Monday's session: Nvidia rallied 5.8%, Alphabet 4.0%, and Tesla 3.7%. The MAG7 Index rose 2.8%, and the Semiconductor Index jumped 3.0%. Micron Technology gained 6.5% and AMD 4.5%. Palantir recovered 8.8%, and Robinhood rallied 4.2%. Across the board, financial conditions indicators signaled risk embracement and loose conditions. High-yield CDS dropped nine bps Monday to 324 bps, trading only a few bps off six-week lows. High-yield spreads (to Treasuries) narrowed a notable 12 bps to 284 bps. Investment-grade and bank CDS prices declined marginally.

For the most fascinating dynamics, look to international markets. European high-yield ("crossover") CDS prices sank 11 to 261 bps Monday - trading only 13 bps off September's multi-year (2021) lows. European (subordinated) Bank CDS dropped an outsized five to 99 bps. Curiously, emerging market ((EM)) CDS was the start performer. EM CDS declined three to 135 bps - the low all the way back to March 2018 (and 80bps below April 11th trading highs). UK yields traded Tuesday at a near one-year low of 4.37%, while France vs. Germany spreads narrowed to a three-month low (73bps).

At Monday's close, major equities indices enjoyed y-t-d returns of 29% in Brazil, 33% in Mexico, 44% in Chile, and 61% in Colombia. In Asia, South Korean equities had returned 73%, China 21%, Hong Kong 37%, Taiwan 24%, Indonesia 23%, and Vietnam 26%. Strong returns in European EM include Poland's 42%, Hungary's 36%, and the Czech Republic's 47%. Equities had returned 41% in Israel and 36% in South Africa. The iShares MSCI Equities ETF (EEM) had returned 34% y-t-d at Monday's close....

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