My Friday column is divided into two sections. The first uses the long-leading, leading, and coincidental indicator method developed by Arthur Burns and Geoffrey Moore. The second looks at the large equity index ETFs.
There are a large number of credit market numbers in the long-leading and leading indicators and with good reason: credit market problems typically pre-date an economic downturn. Thankfully, the Federal Reserve’s early and aggressive intervention calmed the credit market, which lowered yields across the board.
The yield on all manner of credit rose sharply at the beginning of the recession. But all are now lower. AAA (upper left) and BBB (upper right) are now near 5-year lows. CCC (lower left) rose to just shy of 20% but are now back to the 12.5% level.The shorter-end of the corporate yield curve (1-10 year yields; left) and longer-end (10+ years; right) all spiked at the beginning of