US jobless rate is to climb sharply
In fact you can plot the delinquency rate against a number of other variables, and all make fairly grim reading. This chart shows the correlation between delinquencies and corporate bond spreads. The corporate bond sell off that’s taken place over the past couple of months should have been of no surprise given the recent spike in delinquencies, and if you assume that the Q2 delinquency figure will be in the region of 5%, then the spread on the average US BBB rated should be over 200 basis points, not the 177 basis points at Friday’s close.
Last week saw some dire statistics released on US housing starts, permits and completions. US builder sentiment is close to all-time lows, and the housing market debacle is far from reaching the bottom.
The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.