FAST FIVE: Investment Grade Credit Faces Party Hangover In 2020
Spreads haven't returned to the lows they reached in 2018, but investment-grade yields tumbled.
Modified duration in the Bloomberg Barclays index is the highest since the late 1970s, and convexity is the highest in at least two decades.
Supply based on refinancing isn't necessarily bad news for bondholders, except that it will likely come with lower yields.
The gap between BBB and AA spreads is in line with the three-year average.
On the other hand, the widening of BBBs versus BBs means the higher-grade bonds appear relatively cheap.