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Quarter-End Insights

Our Outlook for the Credit Markets

The corporate bond market will probably struggle to return much above break-even in 2014.

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  • Fixed-income markets struggled in 2013 as rising interest rates led to losses
  • Returns in 2014 will be constrained by tight credit spreads and rising interest rates
  • Financials outperform in 2013 and may lead the way again in early 2014
  • Credit risk outlook appears benign in short term, but risks remain
  • Strongest upgrade/downgrade ratio since third-quarter 2011 

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