The downtrend in junk bond yield spreads is a positive for the ongoing U.S. stock rally, although it’s worth keeping an eye on one possible warning sign.
The S&P 500 does not look expensive based on the forward valuation that many investors are used to seeing, but it’s getting close based on the “new normal”.
We are far from a level of market euphoria. There hasn't been a peak with anywhere near the current level of low market bullishness for nearly two decades now.