💥Strong September💥

Filings Abound: Fulcrum BioEnergy Inc., Big Lots Inc., Edgio Inc. + Digital Media Solutions Inc.

For bankruptcy activity. So far. In this edition, we cover a number of recent chapter 11 bankruptcy filings and there are others we’ll get to eventually, e.g., Lumio Holdings Inc., Presperse Corp., and BurgerFi International Inc. But before we dive in, a bit of stream of consciousness because things feel just a little … 🥴 … out there in the lead-up to a potential cut of the Fed funds rate (and beyond that, the election). A few things that caught our attention this week ….

The cost of a shipping a container dropped precipitously recently:

Demand for goods isn’t the only thing that may be signaling something. Check out energy and metals:

China oil demand, in particular, is WAY down, and, reminder, this is a global economy:

Source: IEA

Hedge funds have built a record net short gasoil position.

People seem to be increasingly betting against the market. From Bloomberg:

This ⬆️ got us shaking our heads: certain newer consumer confidence surveys seemed positive (though others, not so much) this past week and yet net purchases of US equities are on the decline. Options data suggests that people are becoming more cautious. Or perhaps equity tourists are retrenching due to a poor savings rate:

That ⬆️ doesn’t portend well for the all-important consumer and we all know that everything hinges upon the consumer.

Of course, the S&P 500 closed up ~3.4% this week so 🤷‍♀️.

All eyes are on Jerome POW-ell and the Fed.

*****

Meanwhile, the credit markets are ripping. The US syndicated loan market enjoyed $21b of repricings in the past two weeks as issuers look to shed interest expense and the market is ready and willing to play ball. Private credit took out two large widely-watched syndicated loans with refinancings (Netsmart Technologies and Kymera). CLO issuance topped $130b, up 75% YOY. High-yield bond issuance is up 80% YOY and the cost of capital is declining. With the markets awash in capital it’s amazing that this is happening: