The High Yield Market Is Breaking Below Support
- The stock market is finally waking up to the fact that long-term interest rates are rising. If we get more confirmation soon that the trend for long-term interest rates has changed, it’s likely going to cause some more serious headwinds for the stock market. (That confirmation might come after this morning’s employment report.)
- The HYG high yield ETF broke slightly below its trend-line from last October. Given that a divergence has developed between the S&P 500 and the HYG, if this breakdown is confirmed soon, it will raise the odds that this divergence will be resolved with a material drop in the stock market…rather than a rally in the high yield market.
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