What Are Financial CDS Prices Telling Us?

The overall market has struggled over the past few days, but surprisingly, the Financial sector has held up well.  Below is an update of our Bank and Broker CDS (credit default swap) Index, which measures the default risk of the major banks and brokers around the world.  Movements in default risk have in the past been important “tells” for the Financial sector, so we wanted to see if CDS prices have been moving higher on this recent market downturn.

As shown below, our Bank and Broker CDS Index has been moving...

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