High-Yield Bonds Overbought As U.S. Stocks Beat The World
This is an abridged version of our Daily Report.
Junk bonds are anything but
High-yield bonds have been among the best performers short- and long-term. That has led to an extreme overbought reading in the Relative Strength Index as well as a 52-week high in the iBoxx Liquid High Yield Index.
That combination has usually preceded even more gains.
It’s the U.S. versus the world
Year-to-date, the S&P is up more than 4% while world stocks (excluding the U.S.) are down more than 4%. That’s never happened before. Other large differentials in YTD returns between the markets have led to weak returns in both, with world stocks tending to see the weakest returns.
Not golden
The GDX Gold Miners index lost more than 3% to land at a fresh 52-week low. Catching that falling knife worked out most of the time over the next few weeks.
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