Barron’s Confidence Index

weekly index of corporate bond yields published by Barron’s, a Dow Jones financial newspaper. The index shows the ratio of the average yield on 10 top-grade bonds to the average yield on 10 intermediate-grade bonds. People who are worried about the economic outlook tend to seek safety in a flight to quality, whereas investors who feel secure about the economy are more likely to buy lower-rated bonds. The spread between highand low-grade bonds thus reflects investor confidence about the economy.
Barron’s also publishes other confidence indicators, such as the ted spread (the difference between Treasury Bill Futures and Eurodollar Futures contract prices); the Lehman Brothers Treasury Bond Index; the Lehman Brothers Corporate Bond Index; the Ryan Labs Treasury Index; the Bond Buyer 20 Bond Index; the Bond Buyer Municipal Bond Index, and the Stock/Bond Yield Gap, which is the difference between the yield on the highest-grade corporate bonds and the yield on the stocks in the Dow Jones Industrial Average.

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