Unlike government bonds that typically rise while stock prices fathom bear market lows, higher-risk corporate bonds tend to fall with risk appetite and equity prices. That trend has held over the past 15 months as most corporate securities have lost value.
As US junk bond prices have tumbled, their yields have risen to around 8.75% from sub-4% in 2021, when desperate and undisciplined funds were eschewing risk management for there is no alternative madness.
The rapid doubling in yields is an encouraging trend for value-conscious investors. But its early days yet. A ton of low-rate debt is not yet up for renewal. A growing default, reorganization and bankruptcy wave suggest that fire-sale prices (and hence higher yields) are yet to come. Se…
Read the full article at: https://seekingalpha.com/article/4616363-corporate-bankruptcy-wave-just-started?source=feed_tag_bonds