Comment by seanhunter

Bond spreads widening reflect lenders' fear that borrowers will default. So what this means is that on average people think that the lowest class of borrowers (junk) are going to struggle to repay. That means it is more expensive for them to borrow, which is going to generally discourage those companies from investing in projects or starting new things which require debt finance. So you would expect the knock-on effect to be less activity in general.