17 October 2014 by lberuti
If you looked at the same Grapple yesterday, it was red hot. Today it is a sea of green as we were back on the rally train. Everyone happily forgot the last two days and sold away all their hedges. Indices, which were impossible to buy when iTraxx Crossover was trading at 430bps 24 hours ago, were offered since the word “go” in the morning. The move tighter from 400bps to 375bps on iTraxx Crossover and from 77bps to 71.5 on iTraxx Main was made in a straight line. That inevitably fed through the single name market and most reference entities were marked tighter across the board. It required a very good reason for a risk premium to widen. AMD’s results were one of them. They announced Q4 revenues down 13% q/q and said they plan to cut 7% of their workforce. It is a lonely red spot though.