One View of S&P 500 Retreat Is It's Stocks Catching Up With Junk
- Bears say equities need to close the gap with high-yield bonds
- But history isn’t showing a particularly wide divergence.
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Chart-happy Wall Street was hypnotized Thursday by a diagram purporting to show the bond market sending terror alerts into stocks.
It’s an overlay of the exchange-traded funds tracking shares and high-yield debt: credit has tumbled since the start of August, the S&P 500 not so much (before today). For equities, that’s supposedly bad, and it certainly looks bad as stocks endure their worst selloff in three months. But is it a reliable signal?