Keyword: spread

S&P 500 Index vs. U.S. High Bond Yield Spread Chart showing the current divergence between U.S. equities and high yield bond spreads, while they are generally correlated. Image: Jeroen Blokland

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.

High Yield Credit Spread and Move Index Does higher rate credit volatility imply a widening of high-yield spreads? Image: Quill Intelligence, LLC

10Y-3M Yield Curve Spread Leads U.S. Real GDP Growth This chart suggests that the 10Y-3M yield spread leads U.S. real GDP growth by one year. So, what about real GDP growth in 2020?

10Y-3M Treasury Yield Spread After First Rate Cut and Recessions After the first Fed rate cut, a steepening of the U.S. 10Y-3M yield spread could suggest a recession is coming. Image: Charles Schwab

U.S. Recession Probability Based on Credit Spreads and Treasury Spreads This chart suggests that the recession probability is low, about 10% based on credit spreads. Image: Charles Schwab

ISM Manufacturing Index and HY-IG Spread This chart shows the correlation between the ISM Manufacturing Index and the HY-IG spread. Image: Oxford Economics, Macrobond

Yield Spread (Baa Bonds – Utility Dividends) This interesting chart suggests that utilities are currently cheap. Image: Morgan Stanley Research

U.S./German 2-Year Yield Spread vs. U.S./Euro Foreign Exchange Rate This chart shows the Euro vs. US Dollar (EUR/USD) and how a wider U.S./German 2-year yield spread corresponds to a stronger US dollar. R² = 0.62 since 2005.