It's still dark out there, but a little light is shining through.
Green shoots are appearing in the U.S. economy, but still no shortage of negative data. Treasury rates continue their ascent on the prospects for economic improvement triggering inflation, and the ongoing supply concerns. Corporate funding costs fell in the face of supply, but the markets seem only to be working for the best performers. The correlation of total returns between treasury and corporate debt falls again. The Morningstar Core Bond Index rose 0.03% in April.
In our May 2009 Bond Market Commentary, Morningstar Indexes' Bill Mast provides further insight into the bond market's performance.
Sanjay Arya is director of Morningstar Indexes.