While the US equity rally has been more “slow and steady” than “big and bold” in the last couple of weeks, credit markets have been flying. In the chart below we show the spreads on CDX HY, the index of high yield credit default swaps used as a reference for junk bond markets. As shown, the back half of May has been a very good period for high yield investors as spreads have run almost 200 bps tighter. They’re now at the tightest levels since the March blow-out in spreads as US equities plunged into the fastest bear market since the Depression. We covered high yield spreads in more detail in last night’s Closer report, which is available to Bespoke Institutional members. Click here to start a two-week free trial.