Yesterday Jeff Gundlach gave another terrific presentation on the markets. There were three charts, in particular, that really stood out to me.
The first shows the recent trend in junk bond issuance. Since 2009, it has just surged to levels never before seen, both nominally and as a percent of GDP:
The second chart shows a new rising trend in companies that are losing money and how default rates typically follow suit:
Finally, these trends are important because, as I’ve been writing for months now, the credit markets typically lead both the economy and the stock market.
‘The bigger they come, the harder they fall?’