Impressive. I had bet the market would not hold. It may be argued that the volume was not high enough but advancers were two-to-one over decliners. Impressive.
The levitation of bonds continues to amaze. TLT up again and hit a intra-day 52-week high.
A couple of days ago I wondered when TIPs would begin to reflect potential inflation in ’09. TIP was up 1.3% but still yielding 7%.
Here is a piece from Bloomberg describing junk bond spreads. It suggests that current junk bond prices are forecasting a 21% chance of defaults. Junk bond ETFs like JNK and HYG could be interesting. JNK yields 16%, trades about 200k shares a day and has a 8 cent spread. HYG yields 12%, trades about 300k shares a day and has a 3 cent spread. Looking at the top ten holdings of each I would favor HYG. Others must as well, hence the lower yield. U.S. Defaults Will Break Great Depression Records, Junk Bond Spreads Show
