High-yield bond weakness has led investors to fear that a recession or bear market may be forthcoming. Widening of high-yield bond spreads (the spread between yields on high-yield bonds and comparable U.S. Treasuries) preceded the start of the stock market downturns in 2000 and 2008, causing many to ask if the latest bout of high-yield weakness portends another downturn.
Here we try to answer that question by looking at characteristics unique to the high-yield bond market and prior periods of similar high-yield weakness.
HIGH-YIELD DISTINCTIONS
