INVESTMENT-GRADE DEBT EDGED OUT HIGH-YIELD DEBT in net prices linked to actual trades as investors carry over concerns about a slowing economy from last week. The market will keep a keen eye on the Fed meeting this week expecting no rate moves and a continued “patient” monetary policy stance. Treasury yields ticked higher in anticipation of changes with the FOMC’s dot plot disclosing individual members' opinions on rates. The 10-year U.S. Treasury note rose 1.4 basis point. S&P +0.24%, Dow+0.12%, NASDAQ +0.22%
|Key Gainers and Losers||Volume Leaders|
|H.J. Heinz Finance Co. 7.125% 8/1/2039 144A
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
1. Kansas City Power & Light Co. (USD) 4.125% 4/1/2049 (03/18/2019): 400MM Secured Notes, Price at Issuance 99.454, Yielding 4.16%.
Target Corp. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 3/15/19, with a net inflow of $1.0B, year-to-date $8.2B 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 Overview
Deals recently freed for secondary trading, notable secondary activity:
- TruGreen LP, PetVet Care Centers LLC, XPO Logistics Inc., MYOB LTD, Dell International
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 19 bp (basis points), as of 03/18/19
- Net positive capital flows into high-yield ETFs & mutual funds
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