• News
  • SAN DIEGO
  • Finance

Credit Swaps in U.S. Hold as European Economic Confidence Rises

Jan. 8 (Bloomberg) -- A gauge of U.S. corporate credit risk was little changed after a measure of economic confidence in the euro area advanced and as investors awaited the start of the corporate-earnings season.

The Markit CDX North American Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses or to speculate on creditworthiness, fell 0.3 basis point to a mid-price of 84.7 basis points at 8:03 a.m. in New York, according to prices compiled by Bloomberg.

An index of executive and consumer sentiment in the euro region rose for a second month to 87 from 85.7 in November, the European Commission in Brussels said today. Economists had forecast a climb to 86.3, according to the median of 24 estimates in a Bloomberg News survey. Signs that the recovery is gaining strength may ease investor concern that an economic slowdown will hinder companies’ ability to repay debt. Alcoa Inc. is scheduled to report its fourth-quarter results after the close of trading today, kicking off the earnings season.

The credit-swaps index typically falls as investor confidence improves and rises as it deteriorates. The contracts pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.

Leave Your Comment

Comments are moderated by SDDT, in accordance with the SDDT Comment Policy, and may not appear on this commentary until they have been reviewed and deemed appropriate for posting. Also, due to the volume of comments we receive, not all comments will be posted.

SDDT Comment Policy: SDDT encourages you to add a comment to this discussion. You may not post any unlawful, threatening, defamatory, obscene, pornographic or other material that would violate the law. All comments should be relevant to the topic and remain respectful of other authors and commenters. You are solely responsible for your own comments, the consequences of posting those comments, and the consequences of any reliance by you on the comments of others. By submitting your comment, you hereby give SDDT the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying and other information you provide via all forms of media now known or hereafter devised, worldwide, in perpetuity. SDDT Privacy Statement.

User Response
0 UserComments

Leave Your Comment

Comments are moderated by SDDT, in accordance with the SDDT Comment Policy, and may not appear on this commentary until they have been reviewed and deemed appropriate for posting. Also, due to the volume of comments we receive, not all comments will be posted.

SDDT Comment Policy: SDDT encourages you to add a comment to this discussion. You may not post any unlawful, threatening, defamatory, obscene, pornographic or other material that would violate the law. All comments should be relevant to the topic and remain respectful of other authors and commenters. You are solely responsible for your own comments, the consequences of posting those comments, and the consequences of any reliance by you on the comments of others. By submitting your comment, you hereby give SDDT the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying and other information you provide via all forms of media now known or hereafter devised, worldwide, in perpetuity. SDDT Privacy Statement.