HYG/IEI, a proxy to inverse Credit SpreadHYG/IEI, high yield bond vs 3-7 year treasury.
Still near new high, no significant credit risk yet. Until we start to see this indictor turning down and break support line, Small caps should be holding up.
Key stats
About iShares iBoxx $ High Yield Corporate Bond ETF
Expense ratio
0.49%
Home page
Inception date
Apr 4, 2007
HYG was the first mover in the high-yield corporate bond market. For many years its been one of the largest and most liquid junk bond ETFs, along with archrival JNK. Its core exposure through the iBoxx index it tracks is solid, covering the most liquid corner of the junk bond market. HYG replicates much of the overall junk bond market, but often with shorter maturity, less interest-rate sensitivity, and also less yield. HYG tends to tracking its index more closely than most. However, direct comparisons are difficult, as HYGs underlying index factors in transaction costs, while others, following industry convention, do not. In sum, HYG is an anchor tenant in the ETF bond market.
Classification
What's in the fund
Exposure type
Corporate
Stocks0.20%
Communications0.20%
Bonds, Cash & Other99.80%
Corporate98.93%
Cash0.67%
Miscellaneous0.13%
Loans0.06%
$HYG will get a boost this summer when rates are cut due to BOJI see the BOJ dumping treasuries this summer, which'll force down the USDJPY pair, and increase inflation here at home. When rates go down, borrowing money is easier, especially for junk corporations avoiding default due to decades high interest rates.
Could AMEX:HYG fall back into the box one la
HYG broke its' 200 mda - RUT is following HYG downHYG broke its' 200 mda - RUT is following HYG down. RUT will likely follow it through the 200mda unless the Plunge Protection Team at the Federal Reserve comes to save it.
Bull Flag with Corporate BondsCorporate Bonds continue in their Bull Flag Channel. Bond market keeps telling us that the Fed cannot remain higher for longer. Not sure on timing, however, it wouldn't surprise me if we see the Fed reverse course in the some what near future.
I trade options and this is by far the best place to be for 2024I trade options so I look for the cheapest way to make the most amount of money. The most Delta for the least Theta. Last year it was MSTR, this year it is HYG and JNK. Record short positions on HYG started in March 2023 and it still continues today.... for example there are 20,000 puts on HYG expir
HYG and why it matters
High yield corporate bonds show a significant correlation with the risk-on/risk-off sentiment for the S&P 500 (SPX). As we can observe, the current market structure resembles a wedge, which can technically serve as both support and resistance.
To add complexity, we're currently at a channel resist
High Yield Vs TSYThis comparison of High Yield (via $HYG) against TSY of similar maturities ($IEI). As the ratio starts to turn down, market gravitates towards risk off environment. Notice how it touches the trend line but doesn't break thru it.
HYGThe high-yield market (HYG)
High yield and stocks are normally highly correlated and the HYG ETF often acts as a barometer for strength in the Stock market..
As you can see things have gotten tight here in the pennant and HYG not surprisingly has chopped around just like the Spy.
Bears will see
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Displays a symbol's price movements over previous years to identify recurring trends.