Is Junk-Bond Market Priced To Perfection?
Chris Kimble | May 13, 2014 10:30AM ET
Junk bond mutual funds are now nearing resistance levels at (1), which has kept them from moving higher for the past 10-years. In the past when these resistance lines were hit, it represented a peak for the junk market and stocks peaked around the same time, too.
The adjusted spread on the high-yield complex is now near the levels hit in 2000 and 2007 at (2) above -- a level where Junk and stocks peaked in the past. For more details on the Adjusted spread...
Is the junk-bond market priced to perfection? Defaults in this complex have been pretty much zero for the past 18 months.
Does it get any better than that?
Humbly I feel junk is acting a little too perfect of late...I'm keeping a close eye on them.
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