MILD RISK-ON SENTIMENT PREVAILS as junk bonds edged out investment-grade debt in prices linked to actual trades. Boston Fed president Eric Rosengren, the Feds hawkish president conceded his stance on raising rates Tuesday morning echoing Chairman Jerome Powell’s words of “patience”. Rosengren known to be bullish stated, “With less ebullience in financial markets and no immediate signs of inflationary pressures, patiently watching to see how the economy develops is the appropriate policy for now.” The 10-year U.S. Treasury note settled up 0.4 basis points. S&P -0.11%, Dow -0.05%, NASDAQ -0.02%
|Key Gainers and Losers||Volume Leaders|
|General Electric Co. FLT% PERP (1)
Wal-Mart Stores Inc. 2.85% 6/23/2020
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
1. Union Electric Co. (USD) 3.5% 3/15/2029 (03/04/2019): 450MM Secured Notes, Price at Issuance 99.915, Yielding 3.51%.
2. WEC Energy Group Inc. (USD) 3.1% 3/8/2022 (03/04/2019):350MM Senior Unsecured Notes, Price at Issuance 99.937, Yielding 3.12%.
Pfizer Inc. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 2/22/19, with a net inflow of $0.69B, year-to-date $9.7B flowed into high-yield.
|Top Widening Credit Default Swaps (CDS)||Top Narrowing Credit Default Swaps (CDS)|
|Rite Aid Corp. (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD CR14)
|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:
- Xylem Inc., 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 03/05/19
- Net positive capital flows into high-yield ETFs & mutual funds
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