The outbreak of COVID-19 has caused an unprecedented dislocation in economic activity. We assess the current economic reality, the state of the CRE market as it entered this crisis, and what we’re watching as we progress through it.

Are wide spreads a signal to buy? Our chart looks at high yield bonds amid the recent sell-off and compares correlation vs. the Q4 2008 sell-off.

We present a series of articles to offer guidance to investors, context from prior economic cycles, and details of policy solutions and expected impact.

Markets plunged in March, with energy leading the way down. Crude prices fell more than 5% due to a dual supply and demand shock. With global economies at a standstill and the world awash with oil, the market appears to be in a holding pattern.

In this note, we take a look at the current corporate credit market impact, the effects of recent Federal Reserve policy response and the best course of action we see for investors moving forward.

HY Bonds and Senior Secured Loans each endured their worst month since 2008, ending down -11.76% and -12.37%, respectively, as the global rout in risk assets continued. Historically, credit markets have been resilient, performing well following sell-offs and rewarding investors for buying in at or near current spread levels.