Welcome to our Corporate Bond Market Volatility analysis for October ‘24 - US edition.
Every quarter, we dive into our datasets to identify volatility in bond markets via the Cognitive Credit app.
Why does Bond Volatility matter? Because volatility is an indicator of opportunity. As our regular readers will already know, once a bond has made a significant price move in a short period of time, it is more likely to make that kind of move again.
Without further delay, here is our US focussed Volatility analysis for October 24.
Market Volatility between Jul 24 - Oct 24
As with our previous editions, we continue to identify opportunities by a 7 point move hurdle: If a bond moved through a 7 point range over the previous 5 closes, we classify that as a volatility event.
All data used for this analysis is available via the Cognitive Credit web application in partnership with S&P Global.
Here’s the list of companies that met the criteria this month, with notable move sizes:
Four names are recurring in our US filter:
- Dish DBS
- Lumen
- QWest
- MDC
That said, with many new entries this quarter, we’ve picked out a few of the names and added some additional insight from the analytics available in our web application below.
Insights
New
For the second quarter in a row, there were over 5 new USD denominated bonds added to our list this quarter compared to our last publication. This illustrates that this particular market based filter, does potentially lend to a broader opportunity set.
With the 2nd largest bond price move we recorded in our latest filter, a new addition is Canadian Pacific Kansas City. Triggering the event was the admission by company CEO Keith Creel, that Operations at Canadian Pacific Kansas City Ltd. will likely grind to a halt due to a rail strike expected in the second half of August. Bonds have yet to recover from this, despite operations on their respective networks being reported as back to normal last month.
Echostar is another interesting addition this month, with bond prices fluctuating in a 50 pt range this year. Despite this, Echostar only appears as a name in our filter, after DirecTV inked a deal to buy EchoStar’s satellite TV division, Dish, creating one of the biggest pay-TV distributors.
Another name from the Communication Services sector that appeared this month is Paramount Global. Sharp moves in this bond have been consistent for over a year now with summer volatility driven by another M&A event in the sector as a deal was announced for Paramount Global’s merger with independent film studio Skydance.
Why do price moves matter?
Why look at price moves that have already happened? Because, as we discovered in our original post, with volatility comes opportunity. A bond that triggers an event is 20x more likely to appear on our Volatility list again than a bond in our coverage universe that hasn’t.
With Cognitive Credit, you can conveniently track market volatility and stay current on as many names as you need. With ready-to-use, fully customizable financials, you can form your own view quickly and easily maintain it with instant earnings updates.
And with built-in analytics, you can interrogate every metric, financial statement and instrument to enhance your understanding of an issuer.
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