From Bespoke Investment Group:
Whenever the equity market is having big moves to the upside or downside, it often helps to compare the move to trends in the credit markets, and more specifically high-yield credit spreads. When the equity market is rising, we should see spreads on high-yield bonds contract, and vice versa when the equity market is declining.
With this in mind, the recent widening of spreads in the high-yield market is a potential red flag. According to…
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