Eli Lilly is a drug firm with a focus on neuroscience, cardiometabolic, cancer, and immunology. Lilly's key products include Verzenio for cancer; Mounjaro, Zepbound, Jardiance, Trulicity, Humalog, and Humulin for cardiometabolic; and Taltz and Olumiant for immunology.

Eli Lilly is a drug firm with a focus on neuroscience, cardiometabolic, cancer, and immunology. Lilly's key products include Verzenio for cancer; Mounjaro, Zepbound, Jardiance, Trulicity, Humalog, and Humulin for cardiometabolic; and Taltz and Olumiant for immunology.

Eli Lilly is a drug firm with a focus on neuroscience, cardiometabolic, cancer, and immunology. Lilly's key products include Verzenio for cancer; Mounjaro, Zepbound, Jardiance, Trulicity, Humalog, and Humulin for cardiometabolic; and Taltz and Olumiant for immunology.

Yields on Treasury bonds have been declining in recent weeks as concerns over inflation have eased. Meanwhile, corporate bond yields have declined as well, but not as rapidly as have Treasury yields -- this as fixed-income investors are now more concerned about a slowing economy and rising bond default rates. As a consequence, spreads between corporate and Treasury bond yields have widened in recent months. The spread between AAA-rated corporate bonds and 10-year government bonds in August was 110 basis points (bps), below the 35-year average of 122 bps but up 35 bps from April. The gap between the government 10-year bond yield and a BAA-rated bond (still investment grade) in August was 183 basis points, below the historical average spread of 229 bps and but up about 40 bps in the past three months. We watch these spreads closely for multiple reasons. From an asset-allocation standpoint, tight corporate bond spreads signal that corporate bond prices are above historical fair value, and we may look to underweight the segment in our model portfolios. From a broad-market standpoint, the changes in the spreads offer clues to the bond market's view of corporate financial strength (which currently appears to be improving given the narrowing spreads). This is important as the economy approaches a period of slower growth.