From the Desk of Ian Culley @Ianculley
Don’t let credit spreads fool you.
High-yield debt hasn’t blown out relative to Treasuries. Regardless, the largest markets in the world are buckling under pressure.
You have to look outside the US and beyond high-yield corporate bonds to see the stress. Here are three cautionary data points to consider: European sovereign spreads, US bond market volatility, and the steep decline in investment-grade bonds.
When you weigh the evidence, it’s clear risks are rising for US markets.
Let’s look at the charts!