Above compares the Pimco High Yield Fund (PHDAX) to the S&P 500 over the past 20-years.
Junk bonds diverged from the S&P 500 for nearly 24-months, prior to stocks peaking in 2000.
Junk bonds diverged from the S&P 500 for nearly 7-months, prior to stocks peaking in 2007.
Junk bonds have been diverging from the S&P 500 for the past 12-months. Will it be different this time?
At this time “It Doesn’t Matter Until It Matters!”
The SPDR Barclays Capital High Yield Bnd ETF (JNK) was unchanged in premarket trading Wednesday. Year-to-date, JNK has declined -0.63%, versus a 6.81% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kimble Charting Solutions.