Junk bond credit default swap spreads (red line, bottom panel) are blowing out to their highest levels since 2012. Investment grade CDS (blue line, bottom panel) are also rising:
The deterioration in junk bonds is most evident in the energy sector (Energy Junk Index down 10% YTD, blue line below) but other areas have been rolling over as well with nearly 50% of the sectors showing negative returns YTD:
Money market spreads continue to rise without any improvement:
The TED spread is also trading at levels last seen in 2011-2012:
The BOFA global risk index exceeded its August highs today and stress levels remain elevated (positive readings indicate above average levels of stress):
Looking at financial conditions globally the region showing the most stress is Asia with their financial conditions index (red line) just coming off a -2 standard deviation event. Europe is worsening despite continued liquidity support from the ECB QE program as their index is at -0.603 and below its levels in August (blue line).
One encouraging sign is the US index is at -0.307 and well off the lows in August, but still in negative territory:
This article is brought to you courtesy of Chris Puplava.