This podcast discusses the divergence between equity and credit market reactions to recent economic uncertainty. Andrew Sheets, head of corporate credit research at Morgan Stanley, explains three contributing factors: U.S. policy uncertainty impacting business confidence, a sell-off in popular stocks, and growing recession concerns. While credit markets have shown resilience due to factors like more conservative borrowers, the potential for a growth slowdown poses a significant risk to credit. Sheets concludes that it's premature to invest in corporate bonds given current weak growth projections.
