WEB Notes: In other news, “Record Number of U.S. Small-Business Owners Say It’s a Good Time to Expand“.
A Wall Street veteran is going against the market consensus by sharpening his economic slowdown call.
The Economic Cycle Research Institute’s Lakshman Achuthan is citing troublesome activity brewing in the quality spread between junk bonds and corporate debt. It’s suggesting default risks are rising — an ominous signal for the stock market.
Achuthan’s charts show the difference between junk bond yields and the rate on quality-rated corporate debt. He then inverts that chart so it gives a clear picture of what’s to come: When the junk-quality spread widens, the line points down, warning of greater economic risk ahead.