Net Issuance – Agency MBS, IG Corporate Credit, and U.S. Treasury Bills and Coupons March and April saw record paces of IG issuance. YTD total of net supply in IG is above last year’s number. Image: Goldman Sachs Global Investment Research
U.S. and Euro Area Composition of Corporate Credit Great chart showing that the U.S. is a market-based financial system, while the Euro Area is a bank-based system with 80% of bank loans. Image: Deutsche Bank Global Research
China Credit Impulse and Corporate Financing Index China credit impulse is weakening as Beijing orders banks to limit loan growth for rest of the year. Image: Alpine Macro
Credit Spreads on High-Quality U.S. Corporates Credit spreads on high-quality U.S. corporates are widening and are flashing a warning sign for markets. Image: Gavekal, Macrobond
Junk and Investment Grade Credit Spreads Corporate bond yield spreads are often used as a gauge of financial market stress. They can provide insights into the likelihood of an economic downturn, but they are not foolproof predictors. Image: Real Investment Advice
U.S. High Yield Corporate Bond Spreads While tight high-yield credit spreads generally reflect robust market confidence, they can also serve as a warning of excessive investor complacency. Given this dual nature, it’s crucial to monitor credit spreads closely. Image: Topdown Charts
Spread Between BBB-Rated Corporate Bond Yield and 90-Day U.S. Treasury Bill Yield The recent increase in the spread between IG credit yield and cash yield marks a significant shift from a 43-year low. Should investors favor U.S. Treasury bills over IG bonds? Image: BofA Global Investment Strategy
Real Rates – U.S. Agg. Corporate Avg. Option-Adjusted Spread and 10-Year U.S. Real Yield Rising U.S. real rates could lead to wider credit spreads. Image: Morgan Stanley Wealth Management
S&P 500 Index and U.S. Corporate High Yield Index Is high yield credit a bearish sign for the S&P 500? Image: Morgan Stanley Wealth Management
Corporate Bonds – Share of Market Value in Bloomberg Barclays USD IG (AAA, AA, A, BBB) Credit quality is deteriorating, as the amount of BBB-rated bonds, one step away from junk bonds, has doubled since 1990. Image: Deutsche Bank Global Research
U.S. Corporate Bond Ownership More than 25% of U.S. corporate bonds are held by insurance companies. Many investment grade investors are not allowed to hold junk-rated bonds. Any drop in the credit ratings could amplify the next recession. Image: NBF Economics and Strategy