Credit Markets Gear Up for More Debt Sales as Junk Yields Drop

Credit markets are riding their Election Day rally through the end of the week, sending yields to new lows and setting the stage for a surge in borrowing in the days ahead.

The cost to protect corporate debt against default is on track to fall for a fifth day in the longest winning streak since summer. Junk yields are approaching a record low while investment-grade spreads have tightened to pre-pandemic levels, as investors increasingly price in a divided government election outcome and get a renewed sense of optimism from a strengthening labor market.

Credit has gained this week as the ...