Stocks Analysis by Investing.com (Calogero Selvaggio) covering: S&P 500, iShares iBoxx $ High Yield Corporate Bond ETF, CBOE Volatility Index, iShares 3-7 Year Treasury Bond ETF. Read Investing.com (Calogero Selvaggio)'s latest article on Investing.
Market's response to the selloff in S&P 500 at the end of last month showcased notable resilience, signaling underlying strength and optimism.
Throughout that correction, the market and breadth readings held up remarkably well. This resilience is notable given that we saw the third-largest spike in the fear index during a roughly 9% correction. Currently, the market favors the bulls, and the long-term bullish trend remains strong. A key factor supporting this trend is the robust credit appetite, with US junk corporate bond yields reaching their lowest levels in two years.Despite recession worries, corporate bond yield spreads, which typically widen before and during recessions, are not signaling an impending downturn.
Specifically, when the P/E ratio approaches or exceeds 2, major declines have typically followed over the past four years. It’s worth noting that double divergences between the S&P 500 Index and the percentage of stocks above moving averages—like we’re seeing now—often predict significant declines followed by strong rebounds.In conclusion, we are in a period of sudden market shifts, and it’s easy for investors to lose control during these times. It’s important to remember that despite the market’s volatility, there’s no need to rush decisions.
Ishares Iboxx $ High Yield Corporate Bond ETF CBOE Volatility Index Ishares 3-7 Year Treasury Bond ETF
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