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Data: Epiq AACER; Chart: Axios Visuals

Total U.S. bankruptcy filings fell to their lowest level since February 2006 last month as massive liquidity and eager bond investors helped prop up businesses throughout the country.

By the numbers: January saw just 32,298 filings, a 6% decline from December, and a 44% decrease from January 2020, according to data from legal services company Epiq.

Between the lines: "Out of court solutions, available liquidity, and general uncertainty has caused a significant pause in Chapter 11 filings this past month," said Deirdre O’Connor, senior managing director of corporate restructuring at Epiq.

  • "We appear to be suspended in an air bubble at the moment."

What's happening: Despite the economy's struggles, big businesses have been able to borrow money through credit markets thanks to a massive surge of liquidity and backing from the Fed, which is expected to step in and buy more bonds should markets tighten.

  • This has created a feeding frenzy among bond investors that led to record bond sales in 2020 and allowed even companies with junk ratings to raise substantial capital.

But, but, but: Small businesses have not fared as well as their larger counterparts. Many don't file for bankruptcy when they go out of business, and one in three respondents to a recently released survey by the Fed said that without additional government assistance they would not survive.

  • Further, the Fed's January senior loan officer survey found that even as credit markets have opened, many banks continued to tighten their lending standards for commercial and industrial loans in the last three months of 2020.

Go deeper

Felix Salmon, author of Capital
Feb 4, 2021 - Economy & Business

The bond market gets optimistic

The markets are more optimistic about growth and inflation than they have been in over four years.

Driving the news: That's the signal being sent by the U.S. Treasury bond yield curve, where 10-year notes now yield a full percentage point more than their one-year equivalents.

Dion Rabouin, author of Markets
Feb 4, 2021 - World

Trouble brewing in the eurozone

Illustration: Sarah Grillo/Axios

Increasing lockdowns, a mutating virus and a botched vaccine rollout have the eurozone headed for a double-dip recession, weighing heavily on its currency and pushing the dollar higher.

Why it matters: The weak dollar (down 10% from its 2020 highs) has been a linchpin for some of the biggest consensus trades this year — strong commodities, skyrocketing U.S. equity prices and emerging market stocks and bonds.

Updated 10 mins ago - Health

Omicron cases confirmed in 5 U.S. states

A healthcare worker inserts a Covid-19 rapid test into a machine in Denver, Colorado. Photo: Daniel Brenner/Bloomberg via Getty Images

Hawaii became on Thursday the fifth state to confirm the newly discovered Omicron variant after New York announced five new cases earlier in the day.

The latest: In Hawaii, the variant was found in an unvaccinated O'ahu resident with moderate symptoms who had previously been infected with COVID-19, per a state health department statement. The variant has also been confirmed in California, Colorado and Minnesota.

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