Credit Faces Tough Year as Cracks Spread: Markets Live 2024

The calm in credit markets won’t last as defaults rise and refinancing needs for risky borrowers ramp up. Investors are looking at meager returns at best, or sizable losses at worst.

• Eric Hobsbawm wrote about a long 19th century ending in 1914 and the short 20th century that followed. For debt markets, this year began on Oct. 31, when 2023 wrapped up early. And much of the 2024 gains have already been made.
• The chart below shows the turnaround in the relative performance of junk bonds and leveraged loans. Loans, which pay floating interest rates, are less vulnerable when yields ...