High Yield credit spread rising again

Junk bond indications under rising pressure again

When last we updated the High Yield spread it was easing in line with the market relief that came with a market bounce from extremely over-bearish short-term sentiment.

Well, now it is back on its rising theme as junk bonds go back out of favor relative to higher quality bonds. It’s an indication of risk ‘off’ behavior as casino patrons abandon their lust for income at any cost. Personally, with the state of short-term Treasuries like the 2yr, I don’t know why more people don’t just park a chunk of their funds there, take the income and appreciate the relative safety.*

high yield spread

* I know dear gold bugs; none of it is safe. It’s debt issued by a hopelessly indebted government. Well, that is why you have your shiny metal, is it not? Insofar as you’re going to be in the bond market however, it’s the way to go in my opinion.

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