by Wolf Richter
At a breath-taking pace. Default rate spikes. US stocks at record.
Standard and Poor’s default rate of US high-yield corporate bonds – the more appealing moniker for junk bonds – jumped to 4.5% in July, the worst since August 2010.
But no problem. The S&P Distressed High-Yield Corporate Bond Index – comprised of 470 bond issues so troubled that they’re trading at a yield that is at least 10 percentage points higher than the Treasury yield – has rallied 48% since February 12.
This includes the 2.5% swoon on Friday, when some of the hot air was let out.