Markets take a battering from growth concerns

Financial markets have been buffeted on concerns about inflation and the strength of economic growth...

Financial markets have been buffeted on concerns about inflation and the strength of economic growth. It is interesting, therefore, that high-yield bonds affected by both interest and credit risk should have proved so resilient. Behind the robustness of high yield bonds has been a relatively benign corporate environment. Strong global economic growth has kept company earnings buoyant. In the first quarter of 2006, US corporate profits as a percentage of gross domestic product reached 12.2%, the highest figure since 1966. Cashflows have remained strong and there is little to suggest that co...