RISK-ON SENTIMENT INTENSIFIED FOLLOWING A SLEW OF POSITIVE EARNINGS as the Dow Jones Industrial Average spiked 230 points. J.P. Morgan and Disney were among the companies that reported on Friday, J.P. Morgan announced the “impact of higher rates” elevated earnings, JPM closed 4.5 percent higher. Disney surged 11 percent after revealing a rival streaming service to Netflix. Economic concerns have dissipated, “Strength in [JPMorgan’s] consumer franchise shows that despite the uncertainty in the fourth quarter of last year, consumers continue to spend and give strength to the overall U.S. economy”. 10-year Treasury note rose 6.4 basis points. S&P +0.64%, DOW +0.96%, NASDAQ +0.44%.
|Key Gainers and Losers||Volume Leaders|
|Anheuser-Busch Co. Inc. 4.9% 2/1/2046 144A
Halfmoon Parent Inc. 4.9% 12/15/2048 144A
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
1. Floodsmart RE LTD (USD) 0.5% 3/7/2022 (04/11/2019): 250MM Unsecured Notes, Price at Issuance 100, Yielding .5%.
2. Avolon Holdings LTD (USD) 3.95% 7/1/2024 Reg S (04/11/2019):1000MM Senior Unsecured Notes, Price at Issuance 99.458, Yielding 4.07%.
Avolon Holdings LTD. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 4/5/19, with a net inflow of $2.0B, year-to-date $12.0B flowed into high-yield.
|Top Widening Credit Default Swaps (CDS)||Top Narrowing Credit Default Swaps (CDS)|
|Hertz Corp. (5Y Sen USD XR14)
Hovnanian Enterprises Inc. (5Y Sen USD MR14)
|Cable & Wireless Communication (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14)
Loans and Credit Market OverviewSYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Six Flags Inc., MW Industries Inc., Ultimate Software Group, Crossamerica Partners LP
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 18 bp (basis points), as of 04/12/19
- Net positive capital flows into high-yield ETFs & mutual funds
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