As all of you know that have been visiting this news site for years, I occasionally discuss the yield of US corporate junk bonds to analyze the possibility of a looming US stock market crash. Above you can see that US corporate junk bonds have been trending higher but I believe it is still a little premature to use this as an indicator to conclude that a US stock market is imminent. However, should yields rise above the red line I’ve drawn above, then the probability of an impending stock market crash will grow, as risk in the junk bond market normally precedes risk in overall stock markets.
