High-yield bonds have recently picked up momentum, with the number of “advancers” significantly outpacing “decliners” over a 10-day period, according to SentimenTrader.
“Risky corporate bonds, or high-yield bonds, recently surged with such intensity that they triggered a rare breadth thrust signal,” which is “an indication of overwhelming and sudden buying pressure across the asset class,” SentimenTrader said in a note emailed Tuesday.
“Given that high-yield debt is particularly sensitive to shifts in economic activity, a new thrust signal is an interesting development against the backdrop of gloomy business sentiment surveys,” the firm said. “High-yield thrust signals have historically preceded robust and consistent gains in the S&P 500 over all time frames.”