“The Bite Is Starting Now”

Reads the best line of the day... from Liz Ann Sonders

Highlights

• Bonds yields continue to rise on hawkish Fedspeak and Moody’s warnings over a government shutdown 

• Tightening financial conditions are weighing on the global stock market, and we think macro factors are a deeper reason to be bearish 

• Record net short speculative positions in bonds and signs of overvaluation in stocks are creating risks of market dislocations… 

• … a downward yield shock could put hedge funds in a fix, translating into increased margin requirements and potentially freezing in the market