UBS: This is How Troubles in the Bond Market Could Impact Stocks
When would-be bond selling becomes actual stock-selling.
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Sell what you can, not what you want, goes the old markets adage.
Analysts at UBS appear to have taken that strategy to heart with a new note detailing the stocks that could come under pressure in the event of a big squeeze in junk-rated bonds issued by companies with weaker balance sheets. The idea here is that the hybrid mutual funds carrying big portfolios of both debt and equities could be hard hit in the event of a long-awaited liquidity crunch that sparks turmoil in the corporate bond market.