High drama in high yield: How Covid-19 and oil crisis double-whammy hit markets

Being selective key to weather the storm

Coronavirus and the OPEC price war combine for a one-two punch to high yield markets.

The impact of the coronavirus had already sent the high yield credit spread north of 550 basis points before the recent 'OPEC+' meeting. Traders and investors hoped for a cut in production from the oil-producing nations in the face of falling demand. Instead they got an all-out price war between Saudi Arabia and Russia. US unemployment jumps by a record 3 million This sent oil prices plummeting toward $30 per barrel (bbl), setting the scene for a historic week across financial markets. Equities suffered their worst down day since Black Monday in 1987; we saw an extraordinary liq...