U.S. SPENDING IMPROVED IN JULY, a signal consumers are confident with the shape of the economy opening their wallets. “Even with elevated policy uncertainty and financial market turbulence, the U.S. consumer continues to display great vitality, emboldened by a large savings buffer.” Spending rose 0.6 percent last month accounting for more than two-thirds of U.S. economic activity. The 10-year note advanced 1.3 basis points. S&P -0.17%, DOW -0.10, NASDAQ -0.46%.
CRUDE OIL SUFFERED LOSSES ON FRIDAY concluding the month in the red as analysts cite the U.S. China trade dispute is slowing economies taking a toll on the oil markets. Russia reportedly surpassed the OPEC agreement producing more than allowed under the deal. West Texas Intermediate finished the month down 6 percent. ADI proprietary index data showed a net yield increment for high-grade versus high-yield bonds. High-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded, MGM Resorts International (USD) 5.75% 6/15/2025 made analysts' 'Conviction Buy' list (See the chart below forMGM Resorts International bonds below.) Corey Mahoney
| Key Gainers and Losers |
Volume Leaders |
| + |
CenturyLink Inc. 6.45% 6/15/2021 |
+ 0.1% |
| |
Pacific Gas & Electric Co. 6.05% 3/1/2034 |
+ 0.1% |
| - |
Goldman Sachs Capital Ii 5.793% 6/1/2043 |
-2.9% |
|
Expedia Inc. 5.95% 8/15/2020
Sprint Nextel Corp. 7.875% 9/15/2023
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
-0.02% |
0.28% |
0.73% |
6.79% |
12.84% |
14.00% |
| Mining |
0.21% |
-0.36% |
-2.86% |
-3.03% |
4.77% |
-0.55% |
| Construction |
0.06% |
0.40% |
1.30% |
5.06% |
12.78% |
9.71% |
| Manufacturing |
0.10% |
0.17% |
0.63% |
3.11% |
10.23% |
7.25% |
| Transportion, Communication, Electric/Gas |
0.07% |
0.20% |
0.64% |
4.26% |
12.34% |
8.84% |
| Wholesale |
0.04% |
0.00% |
-0.04% |
3.09% |
10.95% |
6.88% |
| Retail |
0.21% |
0.14% |
-0.34% |
3.43% |
13.27% |
9.57% |
| Finance, Insurance, Real-Estate |
0.05% |
0.23% |
0.71% |
4.24% |
12.02% |
9.74% |
| Services |
0.16% |
0.28% |
0.85% |
3.81% |
11.53% |
8.73% |
| Public Administration |
0.12% |
0.22% |
1.64% |
5.69% |
12.92% |
17.10% |
| Energy |
0.13% |
-0.25% |
-2.07% |
-2.00% |
6.01% |
0.69% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
Forward Calendar |
|
(None Current 08/30/2019)
|
1. DDM Holding AG: ¬100MM, Expected Q3 2019
2. General Electric Distributed Power: $600M high-yield bonds, Expected Q3 2019
|
Additional Commentary
NEW ISSUANCE WATCH: on 08/26/19 participants welcome a $750M new corporate-bond offering by
Texas Instruments Inc. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 8/16/19, with a net outflow of $4.07B.
| 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
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- AutoData, PaySimple Inc., Nike Inc., US Foods Inc., Duerre Group, Albertsons LLC
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 was 15 bp (basis points), as of 08/30/19
- Net positive capital flows into high-yield ETFs & mutual funds
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