Markets keep hitting the lower bound: Trump threatens China, banks rattle nerves, momentum stocks stumble. QQQ at a crossroads. Brace for next week.

by

Here is the set-up going into tomorrow and next week:

Two weeks ago on Friday Trump pounded stocks lower in the morning by threatening to escalate the trade war with China.

Last week, there were concerns over a renewed bank run.

And early this week there was a momentum stock crash.

Each time the lower bound was tested.

For the past decade, the $1.7 trillion private credit industry has ridden high on a swell of inflows built on the premise they will deliver annual returns close to 10% through bear and bull markets, all while keeping defaults and volatility low.

Still, managers of private funds have different approaches to benchmarking their performance than their peers who oversee publicly-traded debt. The latter have to mark down their positions when bad news reduces their value. Managers of private funds have more latitude in deciding what their loans are worth. That leaves a lot of room for interpretation — and ginned-up returns.
“Valuations can vary significantly and have been a frequent source of contention in the industry,” said Zain Bukhari, associate director of risk and valuations for S&P Global Market Intelligence.
“Mark-to-myth” accounting of unrealized gains “raises serious questions about the transparency, accuracy, and inherent riskiness of reported performance metrics,” according to the academics.

Uh-oh! It looks like you're using an ad blocker.

Our website relies on ads and the generous support of readers like you to keep delivering free, high-quality content. Right now, we are facing serious funding challenges and we need your help more than ever. Disable your ad blocker and this message will vanish. You can also sign up for a membership to enjoy an ad-free experience while supporting our work: https://citizenwatchreport.com/plans/subscriptions/ Your support helps us stay independent, continue our work, and keep content free for everyone. We truly appreciate your understanding and thank you for standing with us.