The Dreadful Spread

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There is a yawning gap taking place between high yield instruments (such as HYG and JNK) versus the equity market in general. My view is that this spread will reconcile, which is a polite way of saying that stocks are prone to some hard-core selling.


Even from a great distance, viewing years of these two (that is, SPY in blue and JNK in white) one can see the chasm that has developed between these two usually-correlated markets is greater than Kirstie Alley’s weight gain between Star Trek II: The Wrath of Khan and the present.