Stocks soared buoyed by M&A (mergers & acquisitions) fueled optimism as Microsoft announced plans to buy Skype for $8.5 billion in cash.

Treasury bonds sold off in what felt like some profit-taking as supply also increased while oil closed at $103 a barrel.

Credit lagged the rally with corporate cash bonds under-performing in particular.

The corporate bond market traded heavy in the morning, with memories fresh of the CVS 10yr deal that went array, but the tone improved somewhat into the afternoon.

Taking a step back and looking at the broader picture, however, one cannot help but feel that we are at or near the tights for now.

Mortgage insurer MBIA's earnings took this player back to the rosy days of early 2007; everyone knew there was a looming problem but nobody could quite put a finger on the timing.

Corporations are lining up to take advantage of record-low interest rates by issuing bonds and real-money players still have mounds of cash to put to work…but what if stocks were to sell off?

Commodities sold off last week and are back on the mend, but even a temporary correction in stocks could lead to a re-pricing in credit.

In flows, there has been an up-tick in players looking at senior / subordinated pricing differentials in financial debt; the pick-up in activity could be driven by Basel capital reserve considerations.

Utility Pacific Gas & Electric hit the market with a $300 million 10 year bond at +108.

Utility IPALCO (AES) sold $400 million of 7 year bonds at +245.

Philip Morris issued $350 million of 10 year debt at +100 and $650 million of 5 year debt at +75.

Bank of America sold $2 billion of 10 year debt at +185 and re-opened a 3 year FRN (floating rate note) at +92.

In the high-beta space auto-parts maker Delphi sold $500 million of 10 year debt at +297 and $500 million of 8 year bonds at +310.