While Equities Hit New Highs, Corporate Credit Spreads Tighten Only Slightly
Investors have been unwilling to pay up for corporate bonds.
Since the end of June, corporate credit spreads have tightened only slightly, even though U.S. stock market indexes have hit new highs. Thus far this month, the average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade corporate bond market) has tightened 4 basis points to +115. In the high-yield market, the ICE BofAML High Yield Master II Index tightened 5 basis points to +402.