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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Jefferies Group (NYSE: JEF ) rose as much as 10.5% in early trading and maintained much of that gain through to the closing bell. Rising prices for its corporate bonds suggest that fears Jefferies could be next after MF Global (OTC: MFGLQ.PK) to face bankruptcy are unwarranted.
So what: According to Bloomberg, Jefferies’ April 2021 notes rallied for a fourth straight day as investors drew distinctions between the firm and MF Global, a futures operator sunk by a multibillion-dollar bet on distressed European bonds.
Now what: The added confidence seems to be the result of repeated efforts to reassure shareholders. Most recently, the company said its own bets on European debt are net short $134 million, Bloomberg said. Deteriorating conditions on the Continent would therefore result in profits rather than the sorts of losses that sent MF Global into liquidation. Is that enough to get you to buy shares of Jefferies Group at current prices? Please weigh in using the comments box below.
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