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Home > Economics > CHART OF THE DAY: What story is the high-yield bond market telling us?

CHART OF THE DAY: What story is the high-yield bond market telling us?

Sep. 30, 2020 by Kennedy Chinyamutangira

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Changes in stock and high-yield bond valuation levels have diverged since the start of September, a shift after largely tracking each other since the beginning of 2020. Stocks reached a peak in early September and have since returned four straight weeks of decline through the end of last week.

Although yields are starting to creep up, which would bring down valuations, high-yield bonds have held up so far. Should the stock market continue to struggle, it is possible that valuation levels in the high-yield bond market would be due for some adjustment. We would expect movements in the two markets to converge as they continue to be driven by similar concerns in the near term.

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Filed Under: Economics, Financial Services Tagged With: high-yield bonds, stock market

About Kennedy Chinyamutangira

In May 2019, Kennedy Chinyamutangira was selected as a senior analyst in RSM’s cutting-edge Industry Eminence Program. The program positions its participants to understand, forecast and communicate economic, business and technology trends shaping the industries RSM serves. Kennedy’s focus is on the financial services industry.

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