World Gone Mad, Chapter 47: Emerging Market Junk Bonds 'Better' Than US

For the first time in almost two years, emerging-market junk bond yields have fallen below those of US...

While the average yield-to-worst for the Bloomberg Barclays Emerging Markets High Yield Bond Index has climbed 70bps this month, its U.S. equivalent has jumped more than 90bps - the highest since Nov 2016.

The two prior occasions when U.S. junk debt was perceived as riskier than developing-nation high-yield bonds lasted for less than a month.

And just in case you were still not convinced of the total and utter disconnect between 'fundamentals' and 'prices', here is Goldman Sachs exposes the record high median leverage in S&P 500 companies... which coincides with near-record low credit spreads (and has coincided with investors rewarding the worst companies over the 'best'.

 

The question is what happens next? As Central Banks' QE efforts reach their tipping point...