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Stocks and Credit Spreads

Posted on May 27, 2008

Since last year, there has been a steady relationship between stocks and credit markets. As strains emerged in the corporate bond market, credit spreads rose and the bull market stalled. When the credit markets all but froze up in March, stocks across the globe swooned and the S&P 500 even briefly hit bear market territory with a 20% decline using intraday prices. As the S&P 500 rallied off the March lows, credit spreads maintained their relationship with stocks and began to decline. Last week, however, that relationship weakened. While the S&P 500 fell by over 3%, the Merrill Lynch ...

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bear market , bull market , corporate bond , lows , markets , sp , treasuries