Investing.com investing.com 24 Dec, 2020 09:00 am

7 Charts Provide A Succinct Look At Current Risk Indicators

7 Charts Provide A Succinct Look At Current Risk Indicators
Stocks Analysis by Michael Gouvalaris covering: XAU/USD, Gold Futures, SPDR® Gold Shares, United States 2-Year. Read Michael Gouvalaris's latest article on Investing.com

When it drops into negative territory, it is a sign of internal stress within credit markets.Currently the index is deep in negative territory, signaling underlying financial conditions remain positive.Clearly, the Fed is very accommodative as the real rate remains deep in negative territory.Investment grade bond spreads are similar, but investment grade is comprised of debt from companies with much better balance sheets and therefore lenders have a better chance of getting paid back in full (lower risk).

No underlying credit risks showing up in either high yield or investment grade speads.The next chart shows the difference between high yield (junk) bond rates in comparison to Treasuries.

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