The tone in the asset-backed market has turned bearish for the first time this year, with many overweight recommendations removed in the past week, and many banks shifting allocations away from sectors with potential for blowups. While any weakness is relatively minor versus what has happened in the corporate debt and equity markets in recent weeks, ABS is no longer untouchable as it had been throughout the first half of the year. Consequently, money may begin flowing into other fixed-income markets.

"It is hard to advise more buying into triple-A rated ABS, as there is not much room for further tightening," said Morgan Stanley research analyst Charles Schorin. "At the margin, within triple-As, I would recommend home equities over credit cards. But overall, it seems like the market is monetizing its gains in ABS and looking for the right time to move into corporates."

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