Pointing to value

chart of the month

The chart below supplied by JPMorgan, shows how credit’s various sectors have performed in the equity and credit market relative to the industrial universe since the start of the year.

The horizontal axis shows the excess spread over the ‘rock bottom’ spread relative to the average in the corporate bond market (excluding financials). The rock bottom spread is the minimum spread over Libor that investors require to be compensated for underlying default risk. Anything over and above this spread

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