As the market stands witness to current low default rates, thin credit spreads, and downward flexes in the loan market, analysts from Standard & Poor's are worried that these current positive market trend indicators will paint the wrong picture for market followers.

In a research report published by S&P last week entitled, Market Indicators Offer Glimpse of Next Round Of Defaults, credit analysts reviewed the signs of weak credit quality, stating that lenders should focus more on negative outlooks and low recovery ratings. "It is becoming increasingly difficult to reconcile these positive indicators with credit realities at a time when capital is pouring into a record-high origination of speculative grade, fixed-income instruments," read the report.

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