The Kobeissi Letter@KobeissiLetter This is concerning:
The 12-week moving average of US bankruptcy filings is now at 17, the highest in 2 years.
This is also in line with the levels seen during the 2020 pandemic and the 2008 Financial Crisis.
In the past, bankruptcies were a leading indicator for US high-yield credit spreads.
This means junk bond spreads may soon begin rising as companies ability to repay debt substantially deteriorates.
Moreover, as higher for longer policy is back, the number of bankruptcies will likely accelerate.
We expect more bankruptcies in 2025.
Poster Comment:
Small caps that have a ton of debt coming due in 2025 are at risk