(New York)

By any reasonable measure, high yield bond markets look very scary right now. The way that yields have plummeted, the way that covenants have weakened, and the general ease of accessing credit are all reminiscent of 2005. Spreads over Treasuries have fallen to just 300 bp. A year ago they were at 600 bp. Companies have successfully weakened investor protections in new issues without penalty, and crucially, default rates will likely fall below 1% this year. The picture was the same in 2005.

FINSUM: By the Crisis, default rates hit 14% and high yield investors got killed. However, a big correction in high yield would take a catalyst. Is it a sooner-than-expected Fed pullback?

(New York)

The post-pandemic run has been marked by staggeringly low volatility and all-time highs in both the S&P 500 and Dow Jones. However…see the full story on our partner Magnifi’s site.

(Frankfurt)

Bonds yields have been so far from even survivable for most income investors, but…see the full story on our partner Magnifi’s site.