Credit Outlook: Investment Grade Is the Better Value Now
- By John Tierney
- 4 min read
Summary
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- Credit spreads tightened significantly over the past month as equities continued to rally and the VIX index of equity volatility traded at post-pandemic lows.
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- We examine drivers of high-yield credit spreads and conclude that high yield is trading near fair value, while investment grade is still cheap following the Silicon Valley Bank collapse.
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- We expect financials, especially banks, will report solid results in the upcoming Q2 earnings season, which should benefit their bonds.
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