Credit Markets Have Been Just as Baffled as Stocks in 2022
- High-grade, junk spreads have tracked the S&P 500 this year
- Investors are ‘out of step’ with economic realities: DataTrek
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Corporate credit markets, long the asset class of choice for people looking for clean insights into the economy, have turned as murky as everything else in 2022.
Rather than serve as a foil to equities’ emotionalism, bond spreads this year have bounced around with virtually the same fickleness, widening at stock troughs and narrowing at peaks, a note from DataTrek Research’s Nicholas Colas highlights. Most recently, spreads on investment-grade bonds reached their ceiling for the year at roughly 165 basis points on Oct. 12, while the S&P 500 touched 2022’s low just a day later. Similar episodes occurred in late June into July, March and early January.