Global Credit Weekly

Still climbing the ‘wall of worry’

July 24, 2025 | Amanda Lynam, Dominique Bly

Key takeaways

  • This week was characterized by two notable themes, in our view. The first was additional progress on trade developments, with a framework announced between the U.S. and Japan, and press reports that the U.S. and Europe were also moving closer to a potential agreement.
  • The second was the signaling from 2Q2025 earnings reporting season, which has offered incremental color on how corporates are navigating policy shifts. While still very dynamic, management teams are continuing to highlight the various operational levers at their disposal to mitigate tariffs – extending the pattern of the past few weeks. And in some instances, companies have lowered the expected impact from tariffs (vs. what was communicated in 1Q2025).
  • Beyond management teams’ guidance, the numbers themselves have cleared market participants’ generally low expectations heading into the quarter. 83% of S&P 500 earnings have surprised to the upside, per data compiled by Bloomberg (as of July 23, 2025, 29% of the S&P 500’s market capitalization has reported).
  • Against this backdrop, risk assets have been resilient, continuing to climb the so-called ‘wall of worry.’ The S&P 500 reached a new all-time high on July 23rd, and credit spreads have continued their grind tighter – hovering at the tight end of the post-financial crisis range.
  • In this Global Credit Weekly, we once again unpack the ongoing theme of corporate resilience. Extending the analysis that we published two weeks ago, our review leaves us comfortable with our expectation for credit spreads to remain in their current tight range, largely driven by corporates’ ability to adapt in this environment. That said, we expect the theme of dispersion to persist and continue to closely watch the ‘feedback loop’ between corporate margins, the labor market, and consumer spending.

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Authors

Amanda Lynam, CPA
Head of Macro Credit Research, Private Financing Solutions
Amanda Lynam, CPA, is Head of Macro Credit Research within the Private Financing Solutions. In this capacity, Amanda leads a team that generates differentiated investment strategy research across global fixed income, liquid corporate credit (IG, HY, leveraged loans) and alternative asset (private credit, real estate) markets.
Dominique Bly
Macro Credit Research Strategist, Private Financing Solutions
Dominique is a Macro Credit Research Strategist. Prior to joining BlackRock, Dominique was an Investor Relations professional at Neuberger Berman, specializing in Private Debt, and a Consultant at Accenture. Dominique received a Bachelor of Science in Business Administration from UC Berkeley Haas.

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