Thursday, November 15, 2012

Credit Markets Show Risk Aversion

When “credit spreads widen” it means the desire to hold “junk” bonds is waning relative to the desire to hold more stable bonds.
The chart below shows the performance of junk bonds (JNK) relative to the total bond market (BND). When the ratio rises, it favors risk-on; when it falls risk-off is in vogue. [...]

Source: http://ciovaccocapital.com/wordpress/index.php/stock-market-us/credit-markets-show-risk-aversion/

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