From the desk of Matt Mondoux, CFA, CMT, CFP®
The basis for the stock market rally has more to do with accommodative monetary policy (e.g. Federal Reserve) and less to the fundamental backdrop of earnings and the economy. However, we believe the High Yield Bond market can provide insight into risk within the stock market. For that reason, we’re still watching High Yield Spreads and want to see them contract (e.g. move below 5.5%) to confirm an S&P 500 breakout above June highs.