Negative interest rates take their toll.
Global interest rates continued to climb as investors priced in expectations that the global economy is entering a reflationary environment.
Investors remained attracted to corporate bonds and corporate credit spreads continued to compress.
Meanwhile, risk-free markets have suffered.
Rising yields have made corporate bonds more attractive to some U.S. and foreign investors.
But high-yield buyers were unwilling to chase credit spreads.
The bond and equity markets last week continued to follow the same trend since the election.
This week's activity may provide greater insight into the direction of the market.
Post-election, uncertainty is expected in the hospital and managed-care sectors, while pharmaceutical and drug supply chain sectors may see a short-term easing.
Risk assets took it on the chin last week as corporate credit spreads widened out, stocks fell, and commodity prices declined.
Market Data and Insights
Energy and basic materials have been some of the best performing sectors year to date.
Market Data and Insights
U.S. Treasury rates rose last quarter as safe-haven demand waned, but tighter credit spreads more than offset the impact of rising rates.
The amount that credit spreads have tightened has offset the amount that interest rates have risen.
After initial Brexit-induced volatility, corporate credit spreads resumed their tightening trend over the third quarter.
But Bank of Japan modifies focus.
Many high-yield investors decided to head for the sidelines last week.
ECB fails to deliver additional monetary easing.
Tighter credit spreads and falling interest rates have combined to boost corporate bond performance so far this year.
Treasury bonds have risen sharply as global fixed-income investors clamor for yield.
This week, U.S. investors will be focused on the Fed's Jackson Hole symposium.
High-yield fund flows bounce back.
Easy monetary policy and low rates should keep providing a tailwind to corporate bonds, but a further slide in oil prices is a key risk to that outlook.
BOE adds corporate bond purchase program to monetary policy.
High-yield fund flows slow to a standstill.
Even in earnings season, trading volume remains high.
Search for yield drives third-greatest amount of weekly inflows into high yield.
Fed funds futures still pricing in low probability of rate hike this year.
Demand for U.S. corporate bonds grows among foreign investors looking for higher all-in yield, says Morningstar's Dave Sekera.
The impact of the ECB's asset purchase program should at least partially offset Brexit-related volatility.
Fed Funds futures starting to price in potential rate cut.
Declining interest rates, tightening credit spreads, and yield carry have driven gains, says Morningstar's Dave Sekera.
Amount of negative-yielding sovereign bonds continues to grow.
Investment-Grade Bonds Fairly Valued, but Pockets of Overvaluation Appearing
Market calls Fed's bluff.
Investors continue to dump high-yield exchange-traded funds.
Given the bond market's recent gains, now is a good time for investors to re-evaluate their risk capacity and tolerance, Morningstar's Dave Sekera says.
Federal Reserve holds steady; timing of future rate hikes ambiguous.
European Central Bank releases program outline to begin purchasing corporate bonds.
Investors run out of enthusiasm for high yield.
Calm waters attract high-yield investors.
While the U.S. economy should hold its course, slowing economic growth in China and commodity price pressures will continue to impact corporate credit spreads, says Morningstar’s Dave Sekera.
Sliding oil prices send high yield wider.
Investors continued to invest in high-yield sector; inflows likely to slow in upcoming weeks.
But investors should brace for another bout of corporate credit spread volatility.
Investors continue to pour funds into high-yield sector.
The European Central Bank's corporate bond purchase raises questions with few answers.