With equities down 5%, it’s nice to see that bonds are fulfilling their as a source of balance for now. The stocks-bonds correlation, which was sharply negative 6 years ago and turned sharply positive 5 years ago, has been modestly positive for some time now. We have an ever-so-slight negative divergence from high yield spreads at the recent high (meaning a higher high for stock prices and higher low for credit spreads), but so far, the spread widening in credit does not seem alarming at all. This suggests that the current drawdown in the momentum trade is just that, a drawdown.