The Wall St. Journal website no longer publishes the Merrill Lynch High Yield Index as regularly as it did in the past.
This index is important because it measures changes in investors' risk tolerance. This is the difference between the yield on lower quality bonds and safer US treasuries. As investors take on more risk, this spread becomes smaller. The fixed-income market often moves ahead of equities, so you may get advance notice of movements in the S&P.
You may want a simple tool from the Federal Reserve Bank in St. Louis:
http://research.stlouisfed.org/fred2/series/BAMLH0A0HYM2
Select the option "Last five observations" to see the spreads you need. Today's data shows the spread narrowing from 5.31% to 5.16% as investors take on more risk.
2013-01-02: 5.16 Percent
2012-12-31: 5.31
2012-12-28: 5.30
2012-12-27: 5.28
2012-12-26: 5.24
Daily, Close, Not Seasonally Adjusted, Updated: 2013-01-03 9:28 AM CST
The Fed can deliver this information to your inbox every morning - at no charge. Just select "Notify Me" at the options on the left of the page.
This index is important because it measures changes in investors' risk tolerance. This is the difference between the yield on lower quality bonds and safer US treasuries. As investors take on more risk, this spread becomes smaller. The fixed-income market often moves ahead of equities, so you may get advance notice of movements in the S&P.
You may want a simple tool from the Federal Reserve Bank in St. Louis:
http://research.stlouisfed.org/fred2/series/BAMLH0A0HYM2
Select the option "Last five observations" to see the spreads you need. Today's data shows the spread narrowing from 5.31% to 5.16% as investors take on more risk.
2013-01-02: 5.16 Percent
2012-12-31: 5.31
2012-12-28: 5.30
2012-12-27: 5.28
2012-12-26: 5.24
Daily, Close, Not Seasonally Adjusted, Updated: 2013-01-03 9:28 AM CST
The Fed can deliver this information to your inbox every morning - at no charge. Just select "Notify Me" at the options on the left of the page.
4 comments:
Hello Mrs Deborah Wier
Can you please correct me if I'm wrong?
During a stock market downtrend the spread tend to be larger.
The spreads are narrower only after a low in the stock market indices.
Isn't a coincident move with stock market?
Thanks.
Joao Rei
Yes, this is often a coinciden indicator. BUT, when spreads move differently from stocks, you have a strong leading indicator.
For example, in Q-III 2011, narrow spreads were a signal to buy during that stock market decline.
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