The market's liking the cyclicals off this massive infusion from the Fed and it's loving the (HYG) which had been the Achilles heel of the tape.
What's the HYG? It is the high yield bond index and we were very concerned that there's no way you can go into a depression and come out with much solvency for weaker credit.
Not this time.
If a bank gives a company a loan, that loan is going to be backed by the Fed. That takes a lot of risk off the cyclicals and the banks that lend to them.
Now what we still lack is science.
If science could catch up, if we had a vaccine, then big business will clean up here.
Smaller business? There it is vital that the lenders and the landlords and the electric companies and the insurers all say, "we know you are going to come back, we are going to forebear." We need that to happen and there's a real chance that we can avoid a depression.
Remember it is a depression that's on the line. The Fed knows that must be avoided at all costs by any means necessary.
Today was a 'by any means necessary' moment. And it's going to work on the financial side.
The virus side? That is the big issue. It's why for all but the worst credit this could be more relevant than the indices indicate.
