New York
AS far as credit markets are concerned, US stock investors have lost touch with reality.
That's seen in the extra yield bond investors demand over Treasuries. The spread has expanded by 0.48 percentage point from a year ago, the most since 2012, even as the Standard & Poor's 500 Index rallied.
While not without precedent, instances when anxiety in bonds didn't seep into equities are rare. More than 70 per cent of the time since 1996, as spreads widened as much as they have since April, the S&P 500 has fallen, with the average decline exceeding 10 per cent, data compiled by Bloomberg show.
"This is something that sooner or later is going to impact the stock market," said Russ Koesterich,...
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