US STOCKS FELL THEN ROSE TODAY, as investors fled into the safety of bonds. The falling bond yields resulted in stocks ending the day near level with this morning. Similarly, the 10-Year Treasury note dropped to as low as 1.598%, but is currently up 2.6 basis points at 1.734%. S&P +0.08%, DOW -0.09%, NASDAQ +0.38%.
IN THE CORPORATE BOND SPACE, Occidental Petroleum Corp. recently priced $13 billion in senior unsecured notes to fund the acquisition of Anadarko Petroleum. Amidst, economic uncertainty, investors flocked to the offering. The bonds, which were issued in 10 different parts, have yields ranging from 2.6% to 4.4%, and maturities ranging from 1 to 30 years. ADI proprietary index data showed a net yield increment for high-grade versus high-yield bonds. High-grade edged out high-yield. Among high-grade bonds showing topmost price gains at appreciable volumes traded, Microsoft Corp. (USD) 3.75% 5/1/2043 made analysts' 'Conviction Buy' lists. (See the chart for ADI indexes above.) Andrew Robartes
| Key Gainers and Losers |
Volume Leaders |
| + |
Vale Overseas LTD 6.25% 8/10/2026 |
+ 0.1% |
| |
Petrobras Global Finance BV 6.85% 6/5/2115 |
+ 1.7% |
| |
American Axle & Manufacturing Inc. 6.25% 4/1/2025 |
+ 2.1% |
| - |
Teva Pharmaceutical Industries LTD 3.15% 10/1/2026 |
-2.4% |
| |
Frontier Communications Corp. 11% 9/15/2025 |
-14.7% |
| |
Citizens Communications Co. 7.875% 1/15/2027 (1) |
-3.2% |
|
Teva Pharmaceutical Industries LTD 3.15% 10/1/2026
Teva Pharmaceuticals Fin BV 6.75% 3/1/2028
Antero Resources Corp. 5.625% 6/1/2023 |
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
0.15% |
-0.36% |
-0.61% |
4.78% |
11.63% |
11.76% |
| Mining |
-0.10% |
-2.41% |
-3.72% |
-4.82% |
4.67% |
-0.85% |
| Construction |
0.10% |
-0.23% |
0.55% |
2.97% |
11.36% |
8.89% |
| Manufacturing |
0.17% |
-0.46% |
-0.44% |
1.15% |
9.15% |
6.71% |
| Transportion, Communication, Electric/Gas |
0.18% |
-0.27% |
0.36% |
3.03% |
11.20% |
8.58% |
| Wholesale |
0.11% |
-0.47% |
-0.05% |
2.32% |
10.66% |
6.86% |
| Retail |
0.16% |
-0.94% |
0.02% |
1.75% |
12.56% |
9.41% |
| Finance, Insurance, Real-Estate |
0.12% |
-0.25% |
0.65% |
2.66% |
10.86% |
8.80% |
| Services |
0.15% |
-0.42% |
0.17% |
2.06% |
9.87% |
7.79% |
| Public Administration |
0.02% |
0.32% |
1.34% |
4.63% |
11.58% |
13.31% |
| Energy |
-0.11% |
-2.15% |
-3.37% |
-3.84% |
5.39% |
0.17% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
Forward Calendar |
|
(None Current 08/07/2019)
|
1. Sinclair Broadcast Group Inc.: $2.55B, seven-year senior secured notes; $2.325B eight year senior unsecured notes
2. Twinset Spa: ¬170M 5 year senior secured floating-rate notes, Expected Q3 2019
|
Additional Commentary
NEW ISSUANCE WATCH: on 08/02/19 participants welcome a $750MM new corporate-bond offering by
iHeartCommunications Inc.. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 8/2/19, with a net outflow of $115 MM, $1.3 billion outflow the prior week.
| Top Widening Credit Default Swaps (CDS) |
Top Narrowing Credit Default Swaps (CDS) |
Rite Aid Corp. (5Y Sen USD MR14)
Weatherford International LTD (5Y Sen USD MR14) |
SuperValu Inc. (5Y Sen USD MR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Albertsons LLC, Helical PLC, London Stock Exchange Group PLC, Maxamcorp Holding SL
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 16 bp (basis points), as of 08/07/19
- Net positive capital flows into high-yield ETFs & mutual funds
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