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Credit Insights

Wider One Week, Tighter the Next

Credit spreads have been in flux as economic news swings from negative to positive.

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Credit spreads tightened significantly last week and rebounded to about the same levels of two weeks ago. Positive economic news released last week more than offset the market's negative trend caused by disappointing economic news the prior week.

Treasury bonds took it on the chin, as the 10-year widened to 2.71% after having traded as low as 2.50%. While last week's action closed some of the disparity between historical interest rate levels and the stock market, we note that over the past decade, when the S&P 500 has been at 1,100--as it was at the end of last week--10-year Treasuries have usually been over 3.00%.

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