| Ticker | Direction | Speaker | Thesis | Time |
|---|---|---|---|---|
| LONG | — | "A front end of the issuance is actually doing quite well. You take Google, for example, they issued... at 27 basis points... and now it's trading at 20 basis points over." Investors are rushing into the "front end" (short duration) of high-quality tech balance sheets because they view it as "money good." This demand compresses spreads, increasing the price of these bonds. Long short-duration investment-grade corporate bonds (specifically Big Tech) as a safe harbor. A sudden spike in short-term treasury yields or a deterioration in tech credit ratings (highly unlikely for Google). | 0:14 | |
| AVOID | — | "In the instance of the UK sterling bond for Google... it was a 60 basis point spread pick up, but uniquely enough is only a ten basis point yield pick up because the 3050 gilt curve is heavily inverted." While a 100-year bond sounds attractive for locking in rates, the "spread duration" risk is massive. Because the UK curve is inverted due to pension demand, you are taking on 100 years of risk for only 10 basis points of extra yield compared to shorter duration. Avoid ultra-long duration tech bonds (100-year) in the current inverted yield environment; the compensation for the risk is insufficient. If the yield curve steepens rapidly, these bonds would become attractive, but currently, they are a "bull trap" due to the inversion. | 0:14 |