HUMBLE INFLATION DATA released on Tuesday affirms the Feds “patient” stance on interest rate hikes. The Consumer Price Index edged up 0.1 percent excluding food and energy, marking the smallest increase since late August of 2018. “We view the risks to the inflation outlook as weighted to the downside as the domestic economy has slowed more quickly than we had expected,” Senior Economist at Moody’s. The 10-year U.S. Treasury note dipped 4 basis points and the 30-year note sank 3.7 basis points. S&P +0.33%, Dow -0.34%, NASDAQ +0.47%
|Key Gainers and Losers||Volume Leaders|
|Takeda Pharmaceutical Co. LTD 5% 11/26/2028 144A
Roche Hldg Inc. 1.75% 1/28/2022 144A
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
1. BB&T Corp. (USD) 3.05% 6/20/2022 (03/11/2019): 1350MM Senior Unsecured Notes, Price at Issuance 99.997, Yielding 3.05%.
2. Dominion Energy Inc (USD) 4.6% 3/15/2049 (03/11/2019): 400MM Senior Unsecured Notes, Price at Issuance 99.967, Yielding 4.6%.
Bank of America Corp. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 3/8/2019, with a net outflow of $1.69B, year-to-date $7.8B 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)
|SuperValu Inc. (5Y Sen USD MR14)
Atmos Energy Corp. (5Y Sen USD MR14)
Loans and Credit Market Overview
Deals recently freed for secondary trading, notable secondary activity:
- MYOB LTD, Dell International, Amer Sports Corp., Orchid Orthopedic Solutions, Neustar 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 18 bp (basis points), as of 03/12/19
- Net positive capital flows into high-yield ETFs & mutual funds
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