Given the sharp 10% correction that the market has experienced for the first time since 2011, we thought we’d check up on credit default swap prices for the major financial firms in the U.S. to see where credit investors are currently gauging default risk. Long-time Bespoke subscribers might remember our Bank and Broker CDS Index that we updated throughout the Financial Crisis and the early stages of the most recent bull market. We haven’t updated it in some time mostly because things have been very stable at very low levels for a couple of years now.
Below is a look at the 5-year credit default swap prices for the six largest U.S. banks and brokers going back to 2007. As you can see, current levels have ticked up very slightly for companies like Citigroup, JP Morgan and Wells Fargo, but in general, there have been no concerns about instability in the U.S. financial sector and its ability to deal with anything that’s thrown its way.
This commentary was pulled from our just-published Bespoke Report newsletter, which goes out every Friday after the close. To see the full 20+ page report with our take on this market and how to play it, sign up for any one of our three subscription offerings. The Bespoke Report is included with all three packages. Enter “bespokereport” in the coupon code section of our subscribe page for a 10% discount on your new membership, and remember, the first five days are on us.
Have a great Labor Day weekend!