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Credit Spreads Aren't Hiding a Market Timebomb
Credit Spreads Aren't Hiding a Market Timebomb

Bloomberg

time6 days ago

  • Business
  • Bloomberg

Credit Spreads Aren't Hiding a Market Timebomb

A glance at the paltry yield premium that corporate debt offers over so-called risk-free government bonds may suggest there's too little reward available for taking on the credit risk of a company versus a sovereign's borrowings. But spreads are compressing for good — and sustainable — reasons. The corporate world overall is in rude health, with robust profit growth and an improving creditworthiness outlook. That's in direct contrast with government finances, which face increasingly stretched budget deficits. US Treasuries, previously the unimpeachable global market lodestar, are looking decidedly tarnished, and there's a similarly gloomy picture across most of the developed world's government debt assets.

Credit Investors Jolted From Complacency on Growth Concerns
Credit Investors Jolted From Complacency on Growth Concerns

Bloomberg

time01-08-2025

  • Business
  • Bloomberg

Credit Investors Jolted From Complacency on Growth Concerns

Gauges of credit risk rose sharply on Friday after payroll data signaled that the labor market is weakening more than expected, jolting debt investors from their recent complacency. The spread on the Markit CDX North American Investment Grade Index, which rises as perceived risk climbs, increased as much as 2.92 basis points to 54.26 during the morning in New York, the biggest intraday jump since late May. An index of credit default swaps for European investment-grade credits rose the most since June 13.

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