Dan Greenhaus of BTIG (@danBTIG) offers up a few facts about the market rally that will grab your attention:
- Purchasers of corporate debt are demanding the smallest interest-rate premium to comparable government bonds since 2007
- Some equity strategists are seeing their six month price targets (established early in December) nearly hit before the year is out.
- After JPM said on December 11 that high yield spreads would tighten in '14 to 415 bps, that target was hit less than two weeks later
- In related news, high yield bond issuance, at $324 billion, was the second highest ever and shows no signs of slowing down as yield hungry investors gobble up everything in sight.
- In the well-respected Value Line ranking system, lower quality stocks are outperforming their higher quality comrades (although this is not entirely a new phenomenon)
None of this is reason to be bearish, but it is a reason to be a bit concerned.
More From Business Insider
- Markets Are Up In Europe
- Here's A Quick Fact About How Strong Markets Are In The Final Trading Week Of The Year
- The Most Important Market In The World Right Now Is One That You're Not Watching