U.S. High Yield Credit Spreads vs. VIX Low high-yield credit spreads and a low VIX may suggest market positivity, but the lack of fear or volatility can paradoxically create a sense of complacency among investors, causing them to overlook potential risks. Image: Topdown Charts
U.S. IG Credit Spread The S&P 500 tends to fall when credit spreads widen. It is therefore a leading indicator to watch closely. Image: Topdown Charts
Relative to Current Levels, by the End of this Year… S&P 500, 10-Year UST Yields, 10Y-2Y Yield Curve, Credit Spreads Will the S&P 500 and U.S. 10-year Treasury yields be higher by the end of this year? Image: Deutsche Bank
Volatility – IG Credit Spreads vs. VIX IG credit spreads could suggest that VIX should be at 20. Image: BofA
Credit Spreads and U.S. Labor Market Despite the Fed’s support, credit spreads remain above their pre-COVID-19 levels and may be taking a cue from the U.S. labor market. Image: Morgan Stanley Wealth Management
VIX vs. IG Credit Spread and S&P 500 This chart shows that the VIX has realigned with the IG credit spread, but not with the S&P 500. Image: Deutsche Bank
U.S. IG Credit Spread and S&P 500 vs. Citi U.S. Economic Surprise Index Chart suggesting that since mid-May, the rally has been driven by positive macroeconomic factors. Image: BofA Global Research
Credit Spreads on High-Quality U.S. Corporates Credit spreads on high-quality U.S. corporates are widening and are flashing a warning sign for markets. Image: Gavekal, Macrobond
U.S. High Yield Credit Spreads and Recessions Chart suggesting that there is little recession fear baked into U.S. high yield credit spreads at the moment. Image: J.P. Morgan
A Widening of High Yield Credit Spreads Is Very Useful to Predict a Recession Like a yield curve inversion and real interest rates above real GDP, a widening of high yield credit spreads is very useful to predict a recession. At the present time, the bond market is not concerned about credit risk.