Chart o’ the Day: What Are Junk Bonds Trying to Tell Us?

Junk bonds are sometimes referred to as a canary in the coal mine for economic optimism (in both directions) and in the biz we call them “chicken equity” – brokers and advisors sometimes use high-yield corporates in place of stocks when coaxing a client off the sidelines back into risk.

Anyway, Chris Kimble gives us a look at the breakdown in the two big junk bond index ETFs, HYG and JNK:

(click to embiggen!)

junk bonds

What does this chart tell us about risk appetites now?


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