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Takeaway: At the current default rate, 2016 is on track to surpass the 2009 all-time corporate bankruptcy high.

INSTANT INSIGHT: An Update On Our #CreditCycle Call - The Cycle cartoon 05.12.2016

As U.S. equity markets hit all-time highs, subtly simmering beneath the surface, the bond market is telling an entirely different story about the state of the U.S. economy.

According to the Financial Times:

"Global defaults hit the milestone century mark last week, a 50% jump from the number of delinquencies at the same point last year and the highest level since the US emerged from recession in 2009.

 

The number rose by four to 100 in the first full week of July, as defaults in the US oil and gas sector ratcheted higher, according to Diane Vazza of S&P Global Ratings.

 

That brings the amount that has been defaulted on to $154 billion."

 

(**S&P Global Ratings now predicts the default rate by junk-rated companies in the U.S. will climb to 5.3% by March 2017, up from 3.8% a year earlier.)

More disconcerting still, at the current default rate, 2016 is on track to surpass the 2009 all-time corporate bankruptcy high. 

INSTANT INSIGHT: An Update On Our #CreditCycle Call - global corp defaults

Meanwhile...

"The asymmetry between Rising Stars (potential for upgrade) & Fallen Angels (downgraded to Junk) in U.S. Credit continues," Hedgeye Financials analyst Jonathan Casteleyn wrote earlier today.

INSTANT INSIGHT: An Update On Our #CreditCycle Call - rising star fallen angel

More to be revealed.

**To read more of our #CreditCycle work check out: