Wednesday, December 24, 2014

Junk Bonds Are Going To Tell Us Where The Stock Market Is Heading In 2015

The Economic Collapse
By Michael Snyder
December 18th, 2014
http://theeconomiccollapseblog.com/archives/junk-bonds-going-tell-us-stock-market-heading-2015 

Do you want to know if the stock market is going to crash next year?  Just keep an eye on junk bonds.  Prior to the horrific collapse of stocks in 2008, high yield debt collapsed first.  And as you will see below, high yield debt is starting to crash again.  The primary reason for this is the price of oil.  The energy sector accounts for approximately 15 to 20 percent of the entire junk bond market, and those energy bonds are taking a tremendous beating right now.  This panic in energy bonds is infecting the broader high yield debt market, and investors have been pulling money out at a frightening pace.  And as I have written about previously, almost every single time junk bonds decline substantially, stocks end up following suit.  So don’t be fooled by the fact that some comforting words from Janet Yellen caused stock prices to jump over the past couple of days.  If you really want to know where the stock market is heading in 2015, keep a close eye on the market for high yield debt.

Continue reading here: http://theeconomiccollapseblog.com/archives/junk-bonds-going-tell-us-stock-market-heading-2015

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