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Junk Exodus!
If those calling for recession in the US economy are correct, it's likely that high yield spreads are mis-priced.
To the extent that's accurate and misery loves company, junk will find solace in companionship. Notwithstanding that markets don't generally assign a trough multiple to trough earnings, the recent re-rating in equities will probably be seen as a false dawn in hindsight, particularly if margin compression ends up manifesting in a deeper profit recession than consensus expects.
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I don’t look at rate data with a microscope, I’m more of a telescope fan. As late as ’22 Q3 I was buying new IG muni issues paying 5%, 7.7% pre-tax equivalent in my bracket. By Q4 those rates had fallen to 4.25%, staying at that level for the rest of the year and into Jan. This week I am once again offered 2 new housing-related muni issues, rated AA, with nine yrs call protection and paying 5%. I purchased both. The fixed income market is simply nuts. I now have 12 individual muni positions and 55 CEFs, 10-12 of which are muni funds. All but two of my CEFs and under-water but I’m drowning less and more slowly. Several of my funds have cut distributions, but more have raised them. My expected income this year is already up 6% over last year. Also, discounts of some significance are starting to appear with short dates to par, helping to turn income into capital gains. Keep those rising rates coming. Once again debt is bringing joy to this old man.