Credit Spreads in the U.S. Continue Tightening Trend
Credit spreads have now recaptured one half of the spread widening because of the most recent sovereign crisis.
The Morningstar Corporate Bond Index tightened another 2 basis points last week to +153. Credit spreads have now recaptured one half of the spread widening because of the most recent sovereign crisis. Since Dec. 2, the Morningstar Corporate Bond Index has tightened 9 basis points. As we noted two weeks ago, we expect the market to quickly recapture the rest of the widening as credit spreads in the United States continue their tightening trend in 2011.
It was a quiet week on the corporate bond trading desks as activity slowed. With little new issuance, activity was mainly directed toward year-end portfolio positioning by mutual fund managers and dealers clearing out stale positions before closing their books for the year. Treasury bond desks had more than their fair share of activity, however, as 10-year and 30-year interest rates surged 20 basis points by midweek, only to tighten back to where they started the week. The 10-year ended the week at 3.32% and the 30-year ended at 4.42%.
David Sekera does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.