INVESTMENT-GRADE BONDS LURE over $3.65 billion of net inflows in the week ending on Wednesday marking the third consecutive week of inflows. Analysts expect the inflows to continue as the Fed’s dovish tone suggested interest rates will rise in the future. Gold jumped nearly 4 percent approaching 5-year highs as the Fed deviated from the “patient” stance on monetary policy. The 10-year note fell 0.06 basis points. S&P +0.95%, DOW +0.94, NASDAQ +0.80%.
JOBLESS CLAIMS DECLINED last week signaling
the labor market remains strong despite a slowing in hiring.
Claims fell to by 6,000 for a seasonally adjusted total of
216,000 surpassing estimates of 220,000.
“For all of the angst around the May jobs report and the potential that job creation is stalling, it bears repeating: Jobless claims are still quite low, and show no signs of sustained deterioration.” Crude oil soars over 5 percent after Iran shoots down a US military surveillance drone over the
Strait of Hormuz. In addition,
US crude supplies fell by 3.1 million barrels for the week ending on June 14
th.
ADI proprietary index data showed a net
yield increment for high-yield versus high-grade bonds. High-grade edged out high-yield. Among high-grade bonds showing topmost price gains at appreciable volumes traded,
eBay Inc. (USD) 4% 7/15/2042 made analysts' 'Conviction Buy' lists. (See the chart for
ADI Indexes above.)
Corey Mahoney (
cmahoney@advantagedata.com).
| Key Gainers and Losers |
Volume Leaders |
| + |
Pacific Gas & Electric Co. 6.05% 3/1/2034 |
+ 1.0% |
| |
Petrobras Global Finance BV 6.85% 6/5/2115 |
+ 0.6% |
| - |
Antero Resources Corp. 5.625% 6/1/2023 |
-1.0% |
|
Frontier Communications Corp. 11% 9/15/2025
Petrobras Global Finance BV 6.85% 6/5/2115
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
0.47% |
2.94% |
5.05% |
4.32% |
10.55% |
12.90% |
| Mining |
0.18% |
-0.18% |
-2.04% |
-0.12% |
7.32% |
2.79% |
| Construction |
0.06% |
0.39% |
1.73% |
3.91% |
9.92% |
7.73% |
| Manufacturing |
0.09% |
0.40% |
0.89% |
2.21% |
8.34% |
6.55% |
| Transportion, Communication, Electric/Gas |
0.20% |
0.76% |
1.94% |
3.59% |
9.44% |
8.57% |
| Wholesale |
0.09% |
0.52% |
1.43% |
2.97% |
9.76% |
6.37% |
| Retail |
0.12% |
0.24% |
1.37% |
3.95% |
10.33% |
8.20% |
| Finance, Insurance, Real-Estate |
0.09% |
0.39% |
1.45% |
2.72% |
9.23% |
8.63% |
| Services |
0.05% |
0.34% |
1.49% |
2.96% |
9.41% |
8.22% |
| Public Administration |
0.32% |
0.64% |
1.78% |
3.17% |
8.90% |
14.44% |
| Energy |
0.20% |
-0.06% |
-1.93% |
-0.05% |
7.02% |
2.26% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
Forward Calendar |
|
1. Nexstar Escrow Corp. (USD) 5.625% 7/15/2027 Reg S (06/19/2019): 1120MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.63%.
2. Clean Harbors Inc. (USD) 4.875% 7/15/2027 144A (06/19/2019):545MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.88%.
|
1. Obsidian Energy LTD: $100MM, Expected Week of 6/17
2. Twinset Spa: ¬170M 5 year senior secured floating-rate notes, Expected Q2 2019
|
Additional Commentary
NEW ISSUANCE WATCH: on 6/20/19 participants welcome a $400MM new corporate-bond offering by Avis Budget Car Rental LLC. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 6/7/19, with a net outflow of $3.2B, year-to-date $6.6B flowed into high-yield.
| Top Widening Credit Default Swaps (CDS) |
Top Narrowing Credit Default Swaps (CDS) |
Weatherford International LTD (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD CR14) |
Cable & Wireless Communication (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Hilton Worldwide Finance LLC, US Renal Care Inc., Perforce Software Inc.
Long-term bond yields are expected to hit a cyclical peak in 2019 given tight fiscal policy and lagging global economies. Europe remains checked by stubbornly low inflationary forces. Positive effects remained in force:
- TED spread held below 23 bp (basis points), as of 06/20/19
- Net positive capital flows into high-yield ETFs & mutual funds
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