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Charts That Matter- 5th Feb

The credit cycle is not going to change because central banks keep rates low. Households and corporates see the real risk in the economy.

Dramatic rally in U.S. high-yield bonds so far this year has reduced the debt’s risk-reward proposition with stocks. Investors are earning the least extra yield to own junk bonds versus the earnings yield on the S&P 500 since October.

China’s share of global GDP has surged from ~3% to 17% over past 2 decades. China climb helped lift other EM economies their share of global activity rise from 16% in 2000 to 23% in 2017, JPM calculated. US lost some ground but rise of EMs largely at expense of other DMs like Japan

Fear and Greed. The interesting part is where it was 1 month ago and 1 yrs ago.

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