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Quarter-End Insights

Credit Market Outlook: Bonds Priced for the Benign

Corporate credit spreads are fairly valued--albeit at the tight end of the range that we view as fairly valued.

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  • Corporate bond markets are pricing in a benign environment in the U.S.
  • Returns for the remainder of 2014 will be constrained by tight credit spreads and rising interest rates.
  • The spread between financial and industrial sectors holds steady.
  • Are larger LBO transactions coming back?
  • Economic growth in China shows further signs of slowing.
  • Downgrades outpace upgrades during the first quarter. 


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