8/19/2009

The corporate-bond market hit bottom during the winter and has since been on an explosive rally. A report from Morgan Stanley warns that corporate bonds, which are far outpacing equities, appear increasingly vulnerable. Andrew Sheets, European credit strategist at Morgan Stanley, noted signs of angst in credit-options markets to his clients. "The pace of the recent rally has, for the first time, begun to show signs of overextension," Sheets said.

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