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Credit Insights

Corporate Bond Market: Summer Starts to Slip Into Fall

Corporate Bond Market: Summer Starts to Slip Into Fall

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Corporate Bond Market: Summer Starts to Slip Into Fall

Activity in the corporate bond market has begun its typical seasonal summer slowdown as market participants gear up to take their remaining summer vacations before school resumes. Even though second-quarter earnings reports continue to be strong and the S&P 500 rose by 0.75% last week, corporate credit spreads ended the week relatively unchanged. The average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade market) tightened one basis point to +112. In the high yield market, the BankAmerica Merrill Lynch High Yield Master Index widened one basis point to end last week at +343. Similarly, in the U.S. Treasury bond market, volatility was muted. The 2-year and 5-year Treasury bonds tightened 3 basis points each to end the week at 2.64% and 2.81%, respectively, whereas the 10-year was unchanged at 2.95% and the 30-year rose only one basis point to 3.09%.

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David Sekera does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.