EQUITIES MARK THEIR FIFTH CONSECUTIVE DAY OF DECLINES as investors react to a weak jobs report igniting concerns of a cooling economy. Jonathan Hill, from BMO Capital remained positive, the “Treasury yield moves speak to willingness to look through this”. Despite the poor report, treasury yields remained stable, the 10-year U.S. Treasury note dipped 1.2 basis points and the 30-year note sank 1.4 basis points. S&P -0.81%, Dow -0.78%, NASDAQ -1.13%
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, Caterpillar Inc (USD) 5.3% 9/15/2035 made analysts' 'Conviction Buy' lists. (See the chart for Caterpillar Inc below) . Corey Mahoney (cmahoney@
|Key Gainers and Losers||Volume Leaders|
|Dell Intl LLC 5.3% 10/1/2029 144A
Midwest Connector Capital Co. LLC 4.625% 4/1/2029 144A
|Industry Returns Tracker|
|New Issues||New Issues [Continued]|
1. Line One Peru Metro Expansion Co. LTD (USD) 4.737% 1/10/2033 Reg S (03/07/2019): 156MM Secured Notes, Price at Issuance 100, Yielding 4.74%.
2. Midwest Connector Capital Company LLC (USD) 4.625% 4/1/2029 Reg S (03/07/2019): 850MM Senior Unsecured Notes, Price at Issuance 99.853, Yielding 4.64%.
Quest Diagnostics 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)|
|Weatherford International LTD (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD CR14)
|SuperValu Inc. (5Y Sen USD XR14)
San Miguel Corp. (5Y Sen USD CR14)
Loans and Credit Market Overview
Deals recently freed for secondary trading, notable secondary activity:
- Wynn Resorts LTD., 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 16 bp (basis points), as of 03/08/19
- Net positive capital flows into high-yield ETFs & mutual funds
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