Junk Bonds Warn Of Coming Stock Market Dump (02/01/2016)
Yes junk bonds are driving the stock market, even though bubble bulls are totally ignoring them right now.
If you want to know where equities are going, look at junk bonds, it says. Specifically, look at the spread in yield between junk bonds and Treasuries. That spread has been widening sharply. And look at the Expected Default Frequency (EDF), a measure of the probability that a company will default over the next 12 months. It has been soaring.
Junk bonds are bouncing, but that bounce is likely to end within the next 5-10 trading days and you can expect the stock market to then follow their lead down again.
For more go here.
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