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Late Corporate Credit Update: IG Risk Off Highs As Stocks Surge Post FOMC

US

Corporate credit risk measures reversed course -- receding as stocks surged higher (ESM2 traded just over 4300.0 in late trade) as Fed Chairman Powell ruled out more aggressive 75bp rate hikes to address surging inflation.

  • Investment grade risk measured by Markit's CDXIG5 index currently -1.990 at 78.431 vs. 83.57 pre-FOMC high and 85.238 2-year high on Monday; CDXHY5 high yield index at 102.858 (+.520).
  • Outperforming credit sectors (tighter or least wide): Technology (-2.0), Consumer Staples (-1.8) and Industrials (-1.7).
  • Lagging sectors (wider or least narrow): Financials (subordinated +1.2), followed by Sr Financials (-0.3).
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Corporate credit risk measures reversed course -- receding as stocks surged higher (ESM2 traded just over 4300.0 in late trade) as Fed Chairman Powell ruled out more aggressive 75bp rate hikes to address surging inflation.

  • Investment grade risk measured by Markit's CDXIG5 index currently -1.990 at 78.431 vs. 83.57 pre-FOMC high and 85.238 2-year high on Monday; CDXHY5 high yield index at 102.858 (+.520).
  • Outperforming credit sectors (tighter or least wide): Technology (-2.0), Consumer Staples (-1.8) and Industrials (-1.7).
  • Lagging sectors (wider or least narrow): Financials (subordinated +1.2), followed by Sr Financials (-0.3).