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The S&P 500 dropped 8.41% in August 2024 while high yield bonds declined 0.85% as the yen carry trade quickly unwound. The JOJO.Index delivered a 6.26% return during the month, surpassing long Treasuries, which gained 5.27%. Michael A. Gayed observed that credit conditions were off for three of the four weeks and said stress in the market built up over several weeks rather than days, highlighting the potential usefulness of weekly signals.
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Gayed has recently commented on other areas of market stress. He highlighted APLD’s $3.0 billion capital expenditures and $116 million in expected revenue as concerns in the company’s earnings report. In a separate note, he observed that PSEC was yielding 21% while trading at a 65% discount to NAV after a payout cut in May.