Comment: positivity is a wonderful thing, but I just don't trust this rally

Cheery news from one of the City’s top bond men. Or is it?

We all know the corporate bond market has come roaring back into action in the past couple of weeks as big companies raise money to get them through the crisis.

Now, a banker tells me, even the European junk bond world is kicking into gear again.

The US has had some big junk-raises already — Pizza Hut owner Yum Brands and Carnival Cruises are about as Covid-junky as you can get.

That was surprising enough, but now the smaller, generally less ballsy European market is gearing up for at least two junk issues, possibly next week.

This is great for the companies involved — even if debt is more expensive to raise than in January.

But, even if the yield is high, the worry is that complacency may be creeping in from investors.

It’s true that central bank emergency bond-buying and state loans show governments are not going to let their biggest companies collapse.

But when Europe’s junk bond market reopens before the bars, shops and schools, it’s alarming.

Likewise, the Dow Jones’s 26% surge in the past month.

These are early days in this most unpredictable crisis.

The recovery may be far rockier than the rallies, and exuberant bond dealers, suggest.