There was a glimmer of hope as credit markets showed signs of thaw.
The economy continued its downward spiral as most major economic indicators showed further signs of weakness. New-home sales declined 15% in December and 45% for the year, unemployment jumped to 7.2%--the highest since 1993--and orders of durable goods were down 2.6% for a fifth consecutive monthly decline. There was a glimmer of hope as credit markets showed signs of thaw. New corporate issuance has been met with strong demand, and yield premiums on investment-grade bonds have contracted across all sectors.
In our January 2009 Bond Market Commentary, Morningstar Indexes' Bill Mast provides further insight into the bond market's performance.
Sanjay Arya is director of Morningstar Indexes.