The junk bond market has been sending some warning shots across the bow of equity markets for several weeks. US high yields have dropped considerably of late, all driven by falls in the telecoms sector. However, a new development—European junk is also seeing a major flight away from the asset class. The iShares EUR High Yield Bond ETF has been seeing heavy outflows as investors have become spooked.
FINSUM: The high yield market is very jittery at the moment, and stocks often move ahead of equities. This is definitely something to keep an eye on.