Credit Market Outlook & Strategy

Research evidence excerpt

J P M O R G A N

North America Credit Research

07 August 2026

Credit Market Outlook & Strategy

We tried to Google a non-hyperscaler related title this

week but alas...

HG spreads tightened for 6 days in a row though the magnitude of the move was

relatively shallow (96bp to 91bp). This came to an end on Thursday as spreads

widened anew from yet another jumbo hyperscaler bond deal from GOOGL.

This seems to have caught the market by surprise and thus hyperscaler spreads

widened 4bp yesterday alone to 137bp and the rest of the market was nearly 1bp

wider too (see our new weekly Hyperscaler and Datacenter bond monitor

section at the end of CMOS for details). This goes to show that the market

remains relatively skittish around hyperscaler issuance despite the much better

tone since the data center deal 2 weeks ago (the YTD wides on our hyperscaler

index was 154bp on July 29th). The good news is that at this point 3 of the 6

hyperscalers have given soft ‘guidance’ that they are most likely done for the

year and our revised TMT supply forecasts reflects this, with TMT analyst

Erica Spear calling for ‘just’ another $50bn through year-end (MSFT is the only

hyperscaler to have not issued YTD). In line with her +$90bn revision, we push

up our overall 2026 supply forecast from $1.92tr to $2.0tr. We do think it

is important to keep track of net issuance more so than gross, and net issuance

prospects seem more positive into year end ($365bn of maturities through

December vs. $588bn gross supply under our revised forecast).

Away from the hyperscaler issuance dynamics, rates stabilizing close to YTD

highs is a positive (WTD returns of +0.4% is the best week in two months) and

it has allowed fund flows to recover somewhat while keeping yield buyers

engaged too. Earnings season is 89% done and just like last quarter it has been

very supportive for BBB spreads, with the BBB-A spread 3bp tighter to 31bp,

essentially back to the YTD tights. All in all, we think HG spreads are in a good

place though we have a hard time conjuring up a scenario where they rally

much further near term given investors will soon be setting up for a busy

…