Corporate Credit Risk: Slight Improvement From Mon's Wides

Corporate credit risk receding slightly Tuesday after breaking five consecutive session string of improved corporate credit risk Monday: investment grade risk measured by Markit's CDXIG5 index surged +7.6 to 71.832 yesterday after Fed Chair Powell comments on willingness to hike at least 25bp at every meeting to stem inflation.

CDXIG5 currently -1.67 to 70.41; CDXHY5 high yield index mildly higher at 105.599 (+.200).

• Tsy sell-off accelerated this morning after StL Fed Pres Bullard comments on Bbg TV urged Fed to "move aggressively to curb inflation" while a combination of factors providing tailwind for stocks: broad based share buy backs, renewed support from China to support economy and markets, and peripherally, weaker crude: WTI -$2.47 (-2.2%) at $109.65, weighs on energy sector, while others gain as crude recedes.
• Outperforming credit sectors (tighter or least wide) ironically includes Energy sector (-2.1) with gas and pipeline services debt risk narrowing. Health Care (-1.8) lead by hospitals and insurance providers; Consumer Discretionary (-1.6) as resorts and airline debt risk improves for second consecutive session.
• Lagging sectors (wider or least narrow): Financials (Sr: -0.6; Sub: -1.1) and Materials (-1.0), BHP Billiton, Rio Tinto and Barrick debt underperorming.