S&P 500 Earnings: Large-Cap Growth Corrects as High-Yield Credit Spreads Tighten

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Stocks Analysis by Brian Gilmartin covering: S&P 500, Microsoft Corporation, Coca-Cola Co, Alphabet Inc Class A. Read Brian Gilmartin's latest article on Investing.com

As of Thursday night, July 18, 2024, only 70 companies had reported Q2 ’24 earnings results, so the sample size is still a little small to draw larger conclusions about

All else being equal, gradually-tightening corporate high-yield credit spreads imply a US economy that remains in reasonably-good shape. Obviously, corporate sector spreads, are a better signal, but that average high-yield spread implies employment, income and spending should remain in line with where they have been the last few years, or maybe a better way to say it is, that the corporate high-yield credit market is not yet forecasting impending doom.

To give readers some perspective, +309 is the tightest high-yield credit spread I’ve seen tracking the data , and +400 has been the widest spread, which occurred during that period of weak economic data in Q4 ’23, as theIf the 10-year Treasury yield trades below 4%, watch how high-yield credit spreads respond, since it could be telling readers that there is more happening in the US economy than just the “disinflation” trade.

 

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