USHY Stock Recent News

Goldman Sachs predicts an increase in domestic high-yield defaults, followed by a retreat in the second half of next year. In August, corporate defaults reached the highest level since 2009, while corporate buybacks were down 20.4% in Q2. The iShares Broad USD High Yield Corporate Bond ETF offers a high yield-to-maturity compared to the S&P 500, but credit spreads remain modest.

USHY's implied credit spread for its higher yield portfolio is in line with the broader market, but where historically spreads are low in the face of a recession. This seems to mean that the market believes that the inflation is mostly supply side and that current rates aren't that high above healthy neutral rates. While we tend to agree with aspects of this idea, USHY has no upside if markets are wrong, so we're not interested.

Despite a banking crisis and volatile oil prices, the domestic high-yield market hasn't made big moves this year. I see balanced risks with USHY as we head into a positive stretch on the calendar.