Chart of the Day - Tuesday, March 30th, 2021

Today’s Chart of the Day was shared on Twitter by Ian McMillan (@the_chart_life). Last week, a multibillion-dollar fund was forced to liquidate its over-leveraged portfolio, causing a sharp sell-off in a handful of stocks. Some seem concerned that this blow-up could pose a systemic risk to the broader market, similar to what happened with Long-Term Captial Management in '98. However, if this truly was a systemic risk, we likely would've seen the credit markets react by now, and we're not. The chart shows the CCC high-yield bond spread in blue, along with the S&P 500 in purple. As Ian points out, this high yield spread often turns higher before any major volatility in stocks. But it continues to trend lower, giving stocks the green-light for now?