Could rising defaults in high yield spread to wider bond market?

Following the long awaited interest rate rise in the US last month, the Federal Reserve might be under less pressure to raise rates over the coming months.

These decisions are likely to remain data dependent and the focus will be on the pace and size of future hikes. Historically, global equity markets perform well for at least a year after the Fed starts to raise rates. Even in 1994, when Alan Greenspan hiked rates several times, the S&P 500 closed higher a year later. Against this backdrop, 2016 could be a positive year for the US market. Economic recovery in the US has also gathered pace in the past few years. Unemployment peaked at 10% in 2009 and this has gradually halved to 5%. The Fed expects this to fall to 4.7% in 2016. Wages ha...