BofA Cools on Junk Priciest to Stocks Since ’93: Credit Markets

Junk bonds are losing their sheen after becoming about the most expensive relative to stocks in at least two decades, prompting firms from Bank of America Corp. to Loomis Sayles & Co. to warn that gains on the debt may wane.

Speculative-grade bonds in the U.S. have underperformed investment-grade notes for the longest stretch since November. The securities yield 0.14 percentage point less than a similar measure for the Standard & Poor’s 500 index of stocks, data compiled by Bloomberg show. As recently as last month the bonds yielded about half a percentage point more than equities.