2000-01-06 Dow Jones jump

Daily Brady Bond Trading Commentary

Thursday January 6, 2000 

Thursday's sell-off in U.S. equities was confined to tech stocks, but a more than 1% jump in the Dow Jones Index did little for sentiment in emerging markets.

Price action in Latin debt was poor as supply hit the secondary market while dealers were reluctant to hold paper. With the poor market conditions and Friday's employment report adding to nervousness, the "on again, off again" new issue from Brazil is apparently on hold for the time being.

Although supply, interest rates and a correction in equities will keep prices under pressure, we still expect to see some cash put to work in emerging market debt at or below current levels. Spreads are reaching levels that provide cushion against interest rate hikes and that also favor a diversity argument.

Contributed by

Credit Lyonnais Securities (USA) Inc.

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