Fear Is Coming Back to the Junk Bond Market: Credit Weekly

Junk bond investors are getting more skittish about risk.

An index of CCC rated bonds in the US has dropped nearly 0.8% over the month ended Thursday, underperforming the broader high-yield market as investors increasingly avoid the riskiest debt. Distressed US dollar loans jumped to $71.8 billion at the end of October — the highest since President Donald Trump outlined his tariff policy in April.

Spreads between US investment-grade bonds and junk have widened over the last week, signaling that investors are favoring safer bonds instead of high-yield notes.

“There is a greater level of caution at the first whiff ...