Rising Corporate Bond Spreads Worrying To Analysts

US corporate bond yields have been rising, and this is an issue which might eventually impact stock investors. With the Dow Jones Industrial Average up more than 600 points Monday afternoon, it is a spread differential with US Treasury rates that could present a challenge for stock investors going forward, a Capital Economics report notes.

Risk-reward dynamics have historically driven correlations between assets. A relatively safe “risk-free” investment in US Treasuries has a yield discounted relative to more aggressive investment in the stock market. When yields in bonds start to rise, they compete...