Credit Spreads Largely Unchanged Last Week
But falling oil prices have pressured corporates over the past month.
Corporate bond markets rallied for much of last week, but credit spreads gave back some of the gains in sympathy with the pullback in the equity markets Friday. While the S&P 500 registered a gain of 2.13% for the week even after accounting for the swoon Friday, corporate credit spreads were largely unchanged. The average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade market) tightened 2 basis points to end the week at +120. The BofA Merrill Lynch High Yield Master Index was essentially unchanged, tightening 1 basis point to end the week at +371.