Recession fears are still dampening markets.
So let’s look at a clue from the bond markets to see how they’re pricing the risks of a potential recession.
Chart of the Day
This chart shows the difference between what investors are demanding from high-yield (aka “junk”) bonds and investment-grade bonds.
The bigger this difference (called the “spread) becomes, it means investors believe the risky companies issuing these bonds have a higher chance of defaulting…
So they demand a higher yield to compensate for this increased risk.
And because these companies are the most likely to default in a recession, this high-yield spread works as a decent barometer of how bond investors are gauging the risks of a recession.
As you can see, while there was a sharp uptick in this spread last week (which has since come down), we’re nowhere near 2020 or 2022 levels.
In fact, even the recent peak was still below levels seen during the August–October pullback of 2023.
As I said, don’t get too caught up in the recession fears – they’re largely overblown.
Insight of the Day
Don’t waste this market recovery by waiting for sentiment to turn bullish.
The bottom of the August–October pullback last year happened when the market was most bearish.
This means if you wait for this market recovery to be a “sure thing” – for sentiment to turn bullish again…
Then you’re “wasting” this recovery – and leaving a lot of potential gains on the table.
Still, we want to be strategic about playing this recovery.
And one of the most strategic things we can do is to follow those with one of the most powerful advantages in the market – the corporate insiders…
High-ranking executives exploiting an SEC loophole to legally trade their own company stock.
I’ve built an entire strategy around following these insiders, and it’s been remarkably effective,
One stock this strategy detected at the end of July had been falling for months – then shot up 50% in just 5 days shortly after the insiders bought – defying the broader market pullback.
But with the market steadily recovering, gains like this could be just the start.
That’s why later this afternoon at 12 p.m. Eastern…
I’m hosting a LIVE masterclass showing you exactly how to apply this insider strategy in your own trading right now.
So, if you haven’t done so yet, make sure you click here to lock in your spot for my LIVE insider masterclass later…
Where I’ll show you:
- How to access the database containing the records of all these insider trades…
- The subtle yet dangerous mistakes traders make when trying to follow these insiders…
- And the 3 counterintuitive insider buying signals you must know about.
Remember, don’t let this market recovery go to waste.
See you at 12 p.m. ET in a bit.
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Ross Givens
Editor, Stock Surge Daily
