Junk Bonds Slump as Morgan Stanley Sees a Bigger Unwind Ahead
- Investors demand most in a month to buy high-yield debt
- ‘Decent case for markets to struggle’ in coming months
The Biggest Risks Facing Bond Markets
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It could be the beginning of the end for an 18-month rally in junk bonds.
A high-yield bond fund run by BlackRock Inc. slumped on Thursday to its lowest level since March, a day after Morgan Stanley warned a correction may already be underway. The cost of protecting speculative-grade bonds against default in the credit-default swap market climbed to its highest level since July 6. Investors demanded the most extra yield in almost a month to buy junk debt, according to a Bloomberg Barclays index fixed late Wednesday.