Good evening,
The Dow Jones being the Mr Predictable today with investors taking solace in the recovery in oil prices despite limited change in inventories. The market wants to be seen to be attempting to ignore this glut electing to ignore new records in the gasoline and distillate inventories. With February prices for Diesel dropping its not looking pretty in the short.
Bottom or not at the current oil price there's casualties both in equity and bondholders in the event of default or fundraisers. The obvious candidates with higher reserve based lending may have to go cap in hand sooner than most envisage with covenants being tested...not an enviable task in the current market, the level of discounting to the SP and warrants will not be pretty. Those BooHoo holders will be able to empathise in due course. The retail bondholder return may just be higher risk than the pricing suggested...
Tomorrow's mumble is likely to cover Oil, Cocoa and Coffee (as predicted all those months ago (3) on FTML) pending time etc...the teaser being, Ice Ice Baby!
Atb Fraser
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