The reason the market doesn't go down is staring at us

CREDIT SPREADS.

The lifeblood of finance /s

Well to be honest, it's the only reason I can think of that 5% rates aren't dragging things lower.

Take a look at the below chart...

Which textbook would tell you that credit spreads, especially in the high yield sector, would be lower at 5% interest rates than when they were at 1.5%?!

It's insanity, right?

Credit spreads pretty much show us the stresses in the market, more than just equities.

Above is the high yield (HY) option adjusted spread...

So everything is going just beautifully in the HY market, guvna?

Hmmm.

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David Belle

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