Goldman Is Already Claiming Victory On One Of Its Top Trades For 2013

Goldman Is Already Claiming Victory On One Of Its Top Trades For 2013
News
Like Us On Facebook
Like Us On Facebook

Goldman Sachs is already closing the trade recommendation, barely a day into 2013. One of the recommendations was taking a longer position in the high yield market by shorting CDX HY Series 19, an index of credit insurance on high-yield debt.

That trade was actually introduced on November 19th, and recognized as the “top trade” of the year in a memo to Goldman Sachs clients on December 4th.

Since that, the CDX HY Series 19 index has fallen exponentially. Charles Himmelberg, a Goldman credit strategist says that regardless of the fact that they are already closing out the trade recommendation, it’s their “highest conviction call in 2013.”

In a note today, Himmelberg wrote: “While our top trade has hit its target somewhat sooner than we had expected, HY remains our highest conviction call in 2013.

At 439bp, synthetic HY spreads are trading inside levels last seen in the first quarter of 2011.

This has clearly eroded valuations, but we still expect HY spreads (both in the cash and synthetic markets) to grind tighter this year, especially once we are past the fiscal headwinds of the first quarter.”

Time will only tell if Himmelberg is right.

Wentworth Jones | Elite. 

Share Tweet
React
Like Us On Facebook
Like Us On Facebook

Contributing Writer

Elite Daily is a medium for people tired of disingenuous content; we have sought to create a space where stimulating, applicable content can reach a like-minded audience.

More In News

World Alexia LaFata

Three Planes Crashing In One Week Is Statistically Impossible, And Here Is The Proof

In the past week, three plane crashes occurred. Malaysia Airlines MH17 was shot down in eastern Ukraine by presumably Russian separatists, and AH5017 is an Air Algerie flight that went missing over northern Mali, but was found crashed near Niamey, the capital of Niger. A TransAsia Airways plane also crashed into a series of residential buildings in Taiwan, killing […]

World Alexia LaFata

Sing Away All You Want Because Singing Is Good For The Body And Soul

When a choir sings together, their heartbeats synchronize, sweeping a calming effect over the entire group that’s as beneficial to their health as a yoga session, says researchers at the University of Gothenburg, Sweden. A group of teenagers was asked to perform three chorus exercises: singing a hymn, humming and chanting. The participants’s heart rhythms were […]

Also On Elite

Life

It’s Not Guns, Crime Or Hate: We The People Are The Problem With Society

“We the people” have a problem, America. It’s convenient to focus vexation at our country’s ever-present adversity on impractical venues such as government. After all, we can vote, complain, post bumper stickers and invest in campaigns, but we really can’t change much. Yet, what do we do in an effort to make changes? We find someone who resembles […]

Wellness

How In Life, The ‘Worst That Could Happen’ Usually Isn’t So Bad

The other day, I was getting coffee with a girlfriend, over-analyzing every aspect of my life (as per usual) when she cut me off and posed a question that I’d been avoiding the whole time: What’s the worst that could happen? Of course, this conversation involved a boy, and of course, I was doing my […]