Zero Hedge
Submitted by Tyler Durden on 02/01/2016
Back before everyone became a junk bond expert, we repeatedly showed what in our opinion was the scariest chart for not only the US, but global stock markets: the unprecedented divergence between the stocks and junk bonds, suggesting that if the recent past is prologue, then the S&P 500 is in for a world of pain as it tracks HY credit far lower.

Since then, these fears have been realized and the market tumbled, unleashing even more central bank jawboning and intervention.
That, however, has done nothing to fill what amount to a staggering gap, and as JPM notes today, the "credit backdrop has deteriorated; the gap with equities remains stark"
Here is what else JPM says as it lays out what were the three scariest charts for stocks in the summer of 2015 and which remains the scariest charts for stocks as we enter February 2016:
- One of the big supports for equities for a long time was the strength in credit.
- The rollover in HY credit is thus not a healthy sign for equity performance. The two don’t tend to diverge for too long


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