Activity in the corporate bond market slowed to a crawl last week as action in the new issue market was virtually nonexistent and trading in the secondary market was muted. Portfolio managers have for the most part completed any year-end window dressing, and bond traders have wound down their positions. Volatility remained muted, and corporate credit spreads traded in a narrow range. Barring some exogenous shock to the capital markets, trading activity and new issue volume should be light for the remainder of the year. The average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade bond market) tightened 2 basis points to +98 while the BofA Merrill Lynch High Yield Master Index widened 1 basis point to end the week at +364.