Credit Spreads Are Not Giving the Same Signal of Recession Yet

The bond market is saying recession is incoming, but credit spreads are not giving the same message. I would expect for as long as growth is slowing, you would expect defensive sectors and risk exposures to outperform cyclical ones. So far, we haven't been seeing layoffs in these cyclical sectors, manufacturing, construction, et cetera. That's really unnecessary. It's sad because layoffs are the collateral damage. And there's possible that these companies have whiplash with hiring and firing people quickly. Hint: Manufacturing may see margins compress more than historically they would just because of such an absurd scenario.

Play episode from 14:23

Transcript

Episode notes

The AI-powered Podcast Player

Save insights by tapping your headphones, chat with episodes, discover the best highlights - and more!

Get the app