FHY - Credit Spreads And The Stock Market
Editor's note: Originally published at tsi-blog.com on October 16, 2018.
This post was prompted by a recent article authored by the always thought-provoking Pater Tenebrarum (a pseudonym) at acting-man.com. The article looks at the relationship between credit spreads and the stock market, in particular the historical tendency for credit spreads to begin widening prior to substantial stock market declines and thus to act as timely warning signals of impending stock market trouble.
The conclusion is: "… it seems… more likely that a stock market decline will put pressure on junk bonds, instead of weakness in