October 1 - October 31, 2020
- October was a volatile month for leveraged credit markets, which produced modest gains.
- Lower-rated credits in the high yield bond market lagged, while lower-rated leveraged loans outperformed.
- We provide a few thoughts on the upcoming U.S. elections.
In last month’s High Yield Bond & Leveraged Loan Review, we stated that we expected October to be a volatile month for markets, and it did not disappoint. At the beginning of the month, markets were faced with the news of President Trump’s COVID-19 diagnosis and subsequent hospitalization. Since that time, COVID-19 cases have steadily risen in the U.S. and across the globe. In particular, the spread across Europe has resulted in renewed lockdowns and further restrictions, albeit to a degree far less draconian to date than those of the spring. In the U.S., rising number of infections have brought the country’s total number of cases to more than 9 million, with hospitalizations similarly increasing. Nonetheless, continued progress on how best to treat patients with the virus has increased survival rates, in particular among those hospitalized.