Credit Monitor

Is credit telling you something equities aren’t? A verdict-first read of corporate bond spreads.

The Credit Monitor watches corporate bond spreads — the price of corporate credit risk in basis points — and answers exactly one question: is credit telling you something the equity screens aren’t?

Credit is a quiet instrument. Most days it agrees with equities and adds nothing — and the monitor says so plainly. Its job is the rare day when spreads start moving and the stock tape hasn’t noticed yet.

Three layers

Ambient

A one-row strip on the Macro page, always visible: verdict, key spreads, ladder heat, tripwire count.

Push

When the verdict changes or a tripwire trips, credit shows up on Today and in the Pre-Market Brief — and only then.

Deep dive

The full panel: pressure map, tripwires, divergence checks, 40 years of history, and what happened to stocks the last N times credit looked like this.

The verdict

The banner at the top is a six-state machine computed from spread levels (percentile vs history) and velocity (how fast they’re repricing, in σ):

State	Meaning
Asleep	Tight, not moving. The default. Nothing here your other screens don’t show.
Priced for perfection	Asleep and pinned near multi-decade tights. Not a timing signal — a regime statement: no stress, but no cushion. From here credit can only hurt.
Stirring	An early widening off the tights with real velocity. The state the monitor exists to catch.
Decompression	The weakest credits (CCC) blowing out while quality sits still. Distress concentrated, not systemic — yet.
Risk-off	Broad widening across the stack. By now everyone knows; the job is measuring intensity.
Healing	Tightening from wide levels — credit giving the all-clear before the headlines do.

The banner’s read line follows the site-wide verdict shape — state, then evidence, then an outlier only when one clears a threshold. Credit has two gated outliers, both about the CCC tail while the verdict isn’t already about it: the tail moving hard right now (CCC−BB widening at ≥1.5σ over a month), or — the slower story a transition-watching state machine is blind to by design — a tail that already sits wide (CCC−BB at p90+ of the archive) after decompressing gradually. Either way, “credit is quiet” never hides a stressed tail.

Under the verdict sits the event study: the same level-and-velocity setup is matched against every comparable episode since 1986, and the banner reports what the S&P did over the following three months — median and worst decile, with the sample size. Numbers, not vibes.

Pressure map

The hero chart. Every credit segment (IG, HY, the AAA→CCC rating buckets, EM) is one dot:

• x-axis — how expensive the segment is vs its own history (level percentile)
• y-axis — how fast it’s repricing (one-month move in σ)
• trail — the dot’s path over the past month

The corners tell the story: bottom-left is complacency, top-right is stress, bottom-right is healing — and top-left, tight but widening, is the early-warning corner. A segment migrating there is the picture worth watching. Hover any dot for its level, percentile, and velocity.

Tripwires

Six explicit thresholds that would flip the verdict, each drawn as a distance-to-trigger bar: the HY spread level, HY velocity, IG joining a widening, CCC−BB tail decompression, credit diverging from equities, and the IG tape — three straight sessions where declining IG bonds outnumber advancers two-to-one on the actual trading tape. The nearest one tells you what to watch; a tripped one turns red and pushes to Today and the brief.

Divergence checks

Credit’s only unique information is disagreement, so four checks run permanently:

• Credit vs equity — spreads widening while stocks make highs is the classic warning
• Tail vs quality — CCC decoupling from BB means distress is being repriced in isolation
• Credit vs vol — spreads moving without the VIX (or vice versa) means one market is asleep
• Tape vs spreads — the share of IG bonds trading down each day, straight from FINRA’s TRACE tape. Participation can crack while spread indices sit still — when the tape runs hot under calm spreads, that’s credit rotting from the inside, and the chip flips to ⚠ deteriorating

Each shows a ✓ confirms / ⚠ diverging chip with a sparkline and a one-line explanation.

Episodes

Forty years of the Moody’s Baa spread with every named stress regime shaded — S&L, LTCM, dotcom, GFC, the euro crisis, COVID, the 2022 hiking cycle — and a “you are here” marker. The long history is the context the headline spread numbers can’t give.

The story

The differentiated layer: the monitor searches the research corpus for recent credit coverage — when tracked writers are talking about spreads, issuance, or high yield, their pieces appear as chips linking into Research. And for the AI-capex borrowers specifically — the names where credit stress would show first — single-name 5-year CDS levels live on AI Watch’s Credit panel, recorded daily.

The rating and maturity ladders — every bucket’s level, percentile, and range — live in a collapsed Detail section at the bottom. Reference tables, one click away when you want them.

Honest limits

Spread data publishes with a one-to-two day lag, so the as-of date trails the equity tape. Percentiles for the ICE series are measured against a multi-year archive that deepens daily. And credit mostly confirms equities — this monitor earns its keep on the days it doesn’t.