Investment Grade Bond Research - October 7, 2019

Posted by Pierre Robert on Oct 8, 2019 9:16:49 AM

STOCK MARKETS WERE SLIGHTLY LOWER AND BOND YIELDS WERE SLIGHTLY HIGHER. China trade talks seem headed to a narrow agreement.The 10-year note rose 3.8 basis points. S&P -0.26%, DOW -0.18, NASDAQ -0.13%

SIGNS OF WEAKNESS IN THE US ECONOMY CONTINUE TO TRICKLE IN. Credit card spending fell in August by 2.2% after posting a gain of 10.5% in July.  ADI proprietary index data showed a net yield increment for high-grade versus high-yield bondsHigh-yield edged out high-grade. Among high-grade bonds showing topmost price gains at appreciable volumes traded,  Mastercard Inc. (USD) 3.375% 4/1/2024 made analysts' 'Conviction Buy' list (See the chart above for Mastercard Inc. bonds above.) Pierre Robert
Key Gainers and Losers Volume Leaders
+   General Electric Co. FLT% PERP (1) + 0.3%
  PepsiCo. Inc. 4% 5/2/2047 + 0.2%
-   GE Capital Intl. Funding Co. 4.418% 11/15/2035 -0.1%
  Citigroup Inc. 3.7% 1/12/2026 -0.1%
GE Capital Intl. Funding Co.   4.418% 11/15/2035
Cardinal Health Inc.   3.41% 6/15/2027
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.22% 0.63% 0.76% 1.37% 5.95% 6.71%
Mining 0.17% 0.61% 0.02% 2.86% 13.06% 12.89%
Construction 0.07% 0.78% 0.07% 2.77% 9.22% 9.96%
Manufacturing 0.11% 0.67% 0.02% 3.26% 11.21% 11.62%
Transportion, Communication, Electric/Gas 0.20% 0.83% -0.17% 4.05% 14.52% 16.09%
Wholesale 0.11% 0.59% 0.20% 3.21% 12.53% 12.33%
Retail 0.10% 0.68% -0.01% 3.74% 12.75% 13.53%
Finance, Insurance, Real-Estate 0.05% 0.61% 0.05% 2.59% 9.94% 11.07%
Services 0.11% 0.76% 0.03% 3.29% 11.04% 12.38%
Public Administration -0.01% 0.46% 0.12% 1.79% 5.56% 8.06%
Energy 0.16% 0.58% -0.05% 2.76% 13.26% 14.18%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-10-08T091353.961

New Issues New Issues [Continued]

(None Current 10/07/2019)



Additional Commentary

NEW ISSUANCE WATCH: on 10/07/19 participants welcome a $750M new corporate-bond offering by WEA Finance. The most recent data showed a money flowed out of highyoutflow ETF/mutual funds for the week ended 9/27/2019, with a net outflow of $258 million.
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14)
Hertz Corp. (5Y Sen USD MR14)
Ghana, Republic of (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD XR14)

unnamed - 2019-09-09T165404.526

Loans and Credit Market Overview


Deals recently freed for secondary trading, notable secondary activity:
  • Raytheon Co., Shearer's Foods Inc., Triumph Group Inc., Seagate Technology, B&G Foods Inc.
OVERALL CREDIT MARKET: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 34 bp (basis points), as of 10/07/19
  • Net positive capital flows into high-yield ETFs & mutual funds

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Topics: High Yield, Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, Finance, Fixed Income, News, Syndicated Bonds, syndicated, research, market update

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