Equity markets are consolidating over the last few days on the hopes of the U.S. government fiscal stimulus, which was upped from an original $1-1.2 trillion to $2.2 trillion over the past week. This package will include stimulus for households, small businesses, and corporations. In addition, the Fed vied to also commit to unlimited QE, which would include purchases of Treasuries, MBS, municipal bonds, commercial paper, and investment-grade corporate bonds. What the Fed isn't touching are junk-debt or equity securities, which still leaves a significant portion of the market exposed.
High-yield credit spreads are at