Makavelim3

even equities are technically spread products (dividend yield + growth over Rf).
typically wen spreads narrow it basically means the market is putting risk on.  HY debt offerrings are getting done.  LBOs and heavily levered companies are able to refinance.  markets are rallying, spreads are narrowing and everyone is putting risk on.
when spreads blow out (widen) everyone is taking risk off and getting conservative w/ their risk exposure.  yields widen, etc.