Systematic Credit and Equity G-255 Trade Indicators for November 17, 2025
Simple. Fast. Institutional-grade. G-255 turns the world's largest balance sheets into daily tradable alpha.
More headlines on Friday focused on U.S. equity prices and the Federal Funds rate, as both U.S. equities and credit spreads improved modestly.
The Quantitative Relationship Between the Federal Funds Rate, U.S. Equities, and Credit Spreads
There is effectively no positive relationship. Quantitatively, lower Federal Funds rates are almost exclusively associated with weakening U.S. economic indicators, declining corporate cash flows, and rising credit stress. Over the past 50+ years, periods of falling Fed Funds rates have historically correlated with modestly lower U.S. equity prices and wider credit spreads.
The relationship between the Fed Funds rate and U.S. Treasury (UST) prices is different: USTs typically rally 3–6 months after rate cuts due to lower funding/leverage costs for banks and intermediaries.
The relationship between lower Fed Funds rates and U.S. technology equity prices: none — at least until the exceptional regime of the past ~15 months.
G-255 returns and Lower Fed Funds Rates:
Equities (248 global public names – unweighted)
YTD the G-255 equity universe has underperformed the Dow Jones Industrial Average by 77 bps.
• Key laggards: DOW, CHTR, ELV, TEF SM, UNH
• Standout performers: Global bank stocks (73 of the 248 names)
Credit
G-255 credit spreads are materially tighter than broad investment-grade indexes – highly-indebted debt continues to outperform.
Flagship Example: G-255 USD New-Issue Systematic Strategy (Daily signals and data published daily)
This is neither a new-issue "flipping" strategy nor a buy-and-hold approach. It is a disciplined, systematic rotation strategy designed for large institutional pools of capital seeking the most efficient USD exposure to the world's largest corporate debt issuers.
Core mechanics
• Trade exclusively within the G-255 universe ($7.2 tn market cap)
• Hold each new bond only until it reaches its predefined "attractive" (tight) trading spread, then exit
2025 YTD Performance Summary
Metric
Result
Average holding period
42 trading days
Average spread tightening to exit level
–8.1 bps
Total G-255 USD new-issue bonds
1,054 ($1.085 tn)
Bonds that reached attractive tight level
901 ($812 bn)
Remaining open (153 bonds) – average move
+1.6 bps ($197 bn outstanding)
Early exits due to issuer re-leveraging
88 bonds
Avg hold – de-levering issuers
34 days
Avg hold – re-leveraging issuers
47 days
FRNs issued
126 ($64 bn)
FRNs that reached attractive level
118 (94%)
Consistent, mechanical, scalable – exactly what the G-255 framework was built for.
G-255 equities are at fair value for the first time since late May. With corporate bond ETF flows declining week-over-week and US HY mutual fund outflow, there is no change in the trading model's daily trade allocation.
Top traded IG G – 255 issuer: Oracle (Baa2/BBB attractive short credit/long equity) (-1 to -2bp) on Friday
Traded HY G – 255 issuer: Coreweave (CRW B1/B attractive short credit) (-1 to -3bp) Friday
Key Systematic Trading Model Economic Indicators Reported Friday:
None
UST 10-Year Rates: -28.7bp YoY and -44.2bp YTD.
Bloomberg 10Y credit spreads are derived by taking the Moody's index yield and subtracting the UST 10Y YTM.
November has seen 14 G-255 issuers, 45 bonds and $55.6 billion of USD supply.
2025 G-255 USD New-Issue Update (YTD)
So far this year, 429 separate G-255 transactions comprising 1,054 individual bonds and a total of $1.084 trillion in new supply have priced.
Of these:
• 901 bonds (85% of all issuance, representing $812 billion) have reached their predefined attractive (tight) trading level, tightening by an average of ~8 bps from issue spread.
Meanwhile, broad U.S. 10-year investment-grade credit spreads are roughly +30 bps wider YTD.
â Highly-indebted, large-cap credit continues to significantly outperform the broader market on a new-issue basis.
Corp Bond ETF flows fell by -$1.8 billion to $807 mm in the week ending November 11, 2025
Dedicated Investment Grade corporate bond ETFs had net outflow of -$203mm
Dedicated High Yield corporate ETFs have net outflow of -$399mm
Mutual Fund flows for the week ended November 12, 2025 (LSEG LIPPER)
Short and intermediate investment-grade bonds: $3.1b inflow vs. $1.82b inflow
High-yield notes: $955.1m outflow vs. $459.1m inflow
Treasuries: $289.2m outflow vs. $315.3m inflow
US leveraged loans: $136.8m outflow vs. $132m outflow
Attractive Long Credit Indicators: 101, (-2 from Friday and -7% below the 200-day moving average of all long indicators. )
Attractive Long Credit Market Cap accounts for: 39% of all undervalued Systematic Credit capital.
Attractive Short Credit Indicators 547, (+93 from Friday and +6% above the 200-day moving average of all model short trade indicators).
Attractive Short Credit Market Cap accounts for: 36% of all overvalued Systematic Credit capital.
G-255 Equity Trade Indicators and US Equity Correlation to Overall US Credit Spreads
US equities and credit markets correlated for a second day Friday as both risk markets were slightly better on the day.
US equities are roughly .3% higher WoW; US credit markets are wider in the week ended November 14.
US equities are +1.5% higher over the past month, US credit spreads are now materially wider.
2025 is on track for the second-weakest year in 32 for USD credit-equity correlated movement—historic 80% vs. ~73% this year.
Systematic Equity Trading Indicators November 13
• Attractive Long G-255 Equity Trade Indicators: 61, (-12 from Friday and roughly the same as the 200-day moving average of all model long trade indicators).
• Attractive Short Equity Trade Indicators 11, (+4 from Friday and just above the 200-day moving
average of all model short trade indicators).
For G-255 issuers, equity prices of the world's most indebted companies was unchanged Friday and -.2% over the past week, while the S&P 500 fell -.06% Friday and rose +.34% over the past week.
G-255 Equity and Credit Indicators – How we use them
• G-255 issuers are the world's 255 largest issuers of corporate debt, as tracked and analyzed in
proprietary systematic credit trading model featured in the "Systematic Trading" Report on Substack and
universe represents the most heavily indebted and actively traded global companies.
• The G-255 refers to a standardized reporting framework used by USD bond issuers to disclose quarterly
financial results. It's not a regulatory mandate but a market convention tracked by systematic credit analysts and
traders. The exact list of 255 issuers isn't publicly detailed but aligns with globally indebted giants.
• Indicator calibration: Credit trading models use earnings data to recalibrate valuation indicators, such as spread to-curve, earnings momentum, and debt ratios.
• Bond-level granularity: Many G-255 issuers have multiple bonds outstanding. Systematic models assess
relative value across the capital structure, flagging overvalued or undervalued bonds.
• Equity-credit linkage: For dual-listed issuers, equity signals (cashflow comparisons and returns to
shareholders influence credit spreads. G-255 disclosures synchronize these inputs
Long Opportunities:
Focus on de-leveraging issuers, including Single A and BBB-rated TMT, BBB-rated Energy,
Euro Yankee Banks, and Floating Rate Notes.
Valuation Insight: The stochastic credit trading model identifies 237 undervalued bonds ($398.1 billion market
value), with 101 long trade indicators across the 6,000-bond USD universe.
Short Opportunities
1,482 bonds ($2.3 trillion) are overvalued per the stochastic credit trading model, with 547 short trade indicators.
U.S. Big 6 Banks (all ratings):No longer a short indicator as of October 22. Bonds +5 to +18.5 bp since 9/22.
Single A and BB Energy: No longer a short indicator as of October 27. Bonds +5 to +18 bp since 9/27.
Single A Healthcare: No longer a short indicator as of October 22. Bonds +4 to +15 bp since 9/22.
Single A Industrials: No longer a short indicator as of October 22. Bonds +5 to +17 bp since 9/22.
Autos: 138 bonds ($142.7 billion) are overvalued, with 74 short trade indicators
Systematic Portfolio Daily Trading Model Indicators
Long Indicators: Target deleveraging new issues with attractive valuations, focusing on 5-year maturities.
Short Indicators: Target releveraging issuers trading at the deepest discount from their model avoid point, avoiding 7-year maturities due to low attractiveness.
Replace Longs: Swap long positions that have reached their avoid trading level.
Portfolio Trading Hurdle: Maintain a 1:1 long-to-short ratio once the 67.5% long position threshold is reached.
Current Status: Add new supply trades where the issuer is deleveraging; add new issue bonds where spreads widened by +2 basis points.
Current Status of Trading Indicators: Last week, one short trade and two long trades reached their avoid trading level. The trading model added three long indicators.
Monitor Trade Position Composition:
Track the percentage of long positions relative to the total portfolio.
If replacing long positions that have reached their avoid trading level pushes the portfolio above the 65% long hurdle, initiate short positions in releveraging issuers (avoiding 7-year maturities) at a 1:1 ratio for additional long positions.
Review: Reassess portfolio balance after today's fund flow data to ensure alignment with the systematic strategy.
Look for individual bond indicators to change overnight: Historic trading levels are leading to overnight adjustments to long, short and avoid indicator levels.
Closed Positions:
General Motors Financial (Baa2/BBB) GM 2.7 06/10/31 short trading indicator reached its avoid trading level Friday 11/7.
Enter New Longs:
Lloyds Bank (A3/A-) LLOYDS Float 11/04/31 was added by the trading model as a long trade indicator on 11/4. The trading model added Meta (AA3/ AA-) META 4 7/8 11/15/35 and META 5 1/2 11/15/45 new supply long trade indicators on 11/7.
Enter New Short Trades:
The trading model added Cigna (Baa1/A-) CI 2.4 03/15/30 and HCA (Baa2/BBB-) HCA 3 5/8 03/15/32 as short trade indicators 11/3.
Current Sample Systematic Basket bond trades based on trading strategy
New Trade Indicators Friday: None
Friday's Basket Trade Long/Short Ratio: 67%
Systematic Long/Short Basket Trade Performance Report (January 4, 2025 – November 14, 2025)
Performance Summary: Total Trades: 184 (1% of total trade indicators).
Long Indicators: 125/144 reached avoid-trading levels, tightening by -9.23 bp.
Short Indicators: 33/40 reached avoid-trading levels, widening by +5.70 bp.
Remaining Longs: 19 widened by +4.02 bp.
Remaining Shorts: 7 tightened by -9.90 bp.
Average Spread Movement: ± 6.5 bp in the indicated direction.
Success Rate: 86% of indicators reached avoid-trading levels, which is slightly below normal.
Average trade holding period: 22.5 days (above average)
Disclaimer - This report is not intended as, and does not constitute an offer, or a solicitation to buy or sell any securities or financial instruments. All data, levels, opinions, and representations herein are provided for informational purposes only and should not be relied upon for making investment decisions. Past performance is not indicative of future results. The authors of this report assume no liability for losses or damages arising from the use of this information. Investors should consult with a qualified financial advisor before making any investment decisions. The information in this report is based on sources believed to be reliable, but no guarantee is made as to its accuracy, completeness, or timeliness.