XLP

High Yield Spreads Widened 61 Basis Points as Small Caps Fell and the S&P 500 Fund Rose

The ICE BofA US high-yield spread widened 61 basis points in 21 sessions to 329 on October 19, while the S&P 500 fund SPY rose 0.63 percent over those dates. The spread is the extra yield investors demand to lend to heavily indebted companies instead of the US Treasury. It went from 268 on September 18 to 329 on October 19, and FRED shows 333 on October 20. Only 22 of 828 such 21-session windows since July 25, 2023 widened as much. Inside the stock market the picture differs: the Russell 2000 fund IWM fell 4.51 percent, while staples, health care and energy funds rose 4.7 to 6.1 percent over the same dates. The level is ordinary and the history is short, so this note describes composition and makes no call on…