Despite multiple “worst-ever” indicators, U.S. equity and corporate credit markets rallied back to near pre-pandemic levels in Q2. With markets trending one way and economic data another, we’re left with mixed signals.

Economy on solid footing, but risks abound.

Economy on solid footing, but risks abound.

Optimism is stretching markets to new heights, but inflation is proving stubborn, limiting the scope of Fed rate cuts and putting upward pressure on rates.

Continued economic stability has fostered healthy fundamentals in most leveraged credit, but risks are accumulating in loans to lower-rated private borrowers.