Worry gap is seen between U.S. stocks and high-yield debt
Here’s my chart for today. You won’t hear me on the Bloomberg Businessweek radio show as usual, though, because we’re simulcasting Bloomberg Television coverage of the Federal Reserve’s interest-rate decision. Look for my Stock of the Day just after 4:15 p.m. (1:15 p.m.) on social media.
U.S. stock investors show “a degree of worry” that’s largely absent in bonds, according to Andrew Garthwaite, a global strategist at Credit Suisse Group AG. He compared the Cboe Volatility Index, or the VIX, with the yield gap between U.S. high-yield bonds and Treasuries in a report Tuesday. While the VIX set a four-month high Monday, lower-rated debt didn’t keep up. The yield spread for the Bloomberg U.S. Corporate High Yield Index closed at 2.9 percentage points, within 0.3 point of a 14-year low reached in July, according to data compiled by Bloomberg. High-yield bonds look riskier than stocks, Garthwaite wrote.