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Junk Bond Blowouts Have Investors Jittery Over Earnings Season

  • Hema, Codere notes slump after reporting Ebitda weakness
  • We are comfortable not adding risk after a 9% rally: Pictet
Paris Looks to Charm London's Brexiles
Photographer: Christophe Morin/Bloomberg

Nervousness around the approaching earnings season is causing high-yield investors in Europe to dial down their appetite for risk.

October has already seen two bond blowouts in the secondary market, providing a taster of what may come during the rest of the month. Last week Dutch retailer Hema BV’s notes lost nearly half their value after reporting a decline in quarterly Ebitda. Codere SA followed up that move with a 10-cent drop in its bonds on Tuesday amid lowered earnings guidance for 2019.