Gavekal Capital: Junk Bond Spreads Accelerating Higher - Not Good for Stocks

Friday, August 1, 2014

Junk Bond Spreads Accelerating Higher - Not Good for Stocks

Earlier this week as asked what junk bonds know that stocks don't. Since then junk spreads to the 10-year US Treasury bond have widened another 20bps as they have accelerated higher. Given the 88% correlation with stocks over the last year, this is something that we will continue to closely monitor.

Aug 2013-Jul 2014:
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