Junk bonds suggest U.S. stocks may have further to run

NEW YORK - U.S. stocks just wrapped up their best quarter in nearly a decade, coming within a stone’s throw of a record high.

“We think this cycle has a lot more time than think,” said Krishna Memani, chief investment officer at Oppenheimer Funds. “It’s not ending in 2019 and it’s not ending in 2020. It has a few more years to go.” While the two frequently move in lockstep, junk bonds have often taken the lead in demarking major turning points or signaling that both sectors may be heading into uncharted territory.

Of even greater importance for stocks and high-yield bonds, the outlook for corporate profits - the fundamental driver in both markets - is weakening. S&P companies’ earnings may have fallen in the first quarter for the first time since 2016, according to Refinitiv data, and full-year 2019 profit growth is seen as less than half the pace of 2018’s tax-cut fueled pace.

“Both markets are getting onto this weird cycle where they’re pointing fingers at each other in the absence of any economic news.”Still, equity markets are flashing green, and market volatility, which rises when investors are anxious, is not far off last fall’s lows when stocks were last at a record.

Credit spreads, or the amount paid to investors above Treasury yields to compensate for holding riskier debt, are also cause for optimism.

. ... . mimi

. .... . mimi

Wall Street at NYC

Finance Finance Latest News, Finance Finance Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

China’s Riskiest Dollar Bonds Are SurgingA fear gauge for the junk bond market has receded. Prices of U.S. dollar bonds issued by Chinese companies with non-investment-grade credit ratings surged in the first quarter of 2019, rewarding investors who bought the securities when many of them were trading at distressed levels last year. FortuneNewsWire also covered this Shame on China, butchering detainees to supply human vital organs for China's transplant tourism trade on a global scale. Approximately 1.2 million people butchered a year for their retail organs, valued at $350,000. CrimesAgainstHumanity Genocide is forever. StopChinaNOW
Source: WSJ - 🏆 98. / 63 Read more »

Morgan Stanley: With yields falling, these stocks that act like bonds may be a good betMorgan Stanley's strategists see outperformance in stocks that behave like bonds as yields — and economic forecasts — continue to recede.
Source: CNBC - 🏆 12. / 72 Read more »

Exclusive: U.S. orders foreign firms to further cut down on oil trades with VenezuelaThe United States has instructed oil trading houses and refiners around the worl... Julia_AC_Payne dmitryZ_reuters Wall Putin Seeing Opportunity to take over the world Julia_AC_Payne dmitryZ_reuters Are are sanctions causing the government to fail Julia_AC_Payne dmitryZ_reuters The GOP tries to convince everyone that Socialism caused the problems there. LIES! Capitalism is the problem down there, it seems.
Source: Reuters - 🏆 2. / 97 Read more »