Demand for U.S. corporate debt
Demand for U.S. corporate debt has mirrored the fortunes of the stock market rebound since December's correction, with the S&P 500 taking aim at the 2.9k region presently from 2,346 low in December (vs 2,940 record highs). The HYG iShares iBoxx High Yield Corporate Bond ETF hit highs near 86.24 earlier, compared to 52-week lows of 79.55. Likewise, the LQD iShares iBoxx $ Investment Grade Corporate Bond ETF topped 118.27, compared to 52-week lows of 111.25 in December. The "Powell Put" Fed pivot-switch to an extended pause on tightening has evidently given quiet confidence to investors in corporate bonds, in addition to past tailwinds from tax cuts, deregulation and the like. Interestingly, there has also been a grab for yields/returns as the yield curve inverted and longer-dated yields collapsed into March, not to mention the reversal in European and Japanese yields below zero. In addition, the simultaneous slump in the VIX equity volatility index towards pre-normalization levels near 13.00 has reduced some risk for the bulls relative to December highs near 36.10.