Spreads on some of the riskiest corporate bonds have surged, while less-risky parts of the credit market have not seen nearly as much stress. The split is sending investors mixed signals and making some of them nervous.
Credit markets are sending unusually mixed messages to investors, and the divergence is making some people nervous.
However, spreads on other, less-risky cohorts of the corporate credit market haven't seen nearly as much stress as the riskiest bonds.
One strategist at Manulife John Hancock Investments said investors are navigating uncharted territory, because nobody has seen anything like this in recent memory.
Investors on Wall Street are trying to determine whether recent moves in the bond market signal complacency, with cracks appearing relatively contained for now.
Source: MarketWatch (snippet-based)
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