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Tracy Shuchart, independent trader and strategist, highlights a sharp increase in the yield premium that investors require to hold CCC rated junk bonds compared to those rated just below investment grade.
According to Shuchart, the extra yield demanded has risen to about 6.4 percentage points, marking the highest level in 14 months. This development signals growing concerns over stagflation risks in global credit markets.
Shuchart recently stated that AI stocks were the main driver of recent S&P 500 gains, with the index hitting 11 record closes in May. She has also shared Trafigura's warning that oil and energy markets face critical risks as prices climb and supply buffers fall. These observations come as credit market tensions build.