U.S. STOCKS DROPPED MONDAY morning amid trade tensions with China. By mid-afternoon, most of the losses had been recovered, despite being down close to 500 points earlier in the day. Industrial and tech companies with exposure to China fared the worst, as shown by a 0.5% decline in the NASDAQ. 10-Year U.S. Treasury Notes fell 2.5 basis points. S&P -0.45%, Dow -0.25%, NASDAQ -0.50%.
THE LOSSES THIS MORNING WERE DESCRIBED as a
"knee-jerk reaction in the market” by Michael Gayed, portfolio manager at New York investment advisory Pension Partners LLC. The large decline this morning shows that
"investors are still sensitive about the possibility of deteriorating commercial relationships between the world's two largest economies". Meanwhile,
crude oil and gold traded 1.19% and .02% higher respectively.
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,
Xerox Corp. (USD) 4.8% 3/1/2035 made analysts' 'Conviction Buy' lists. (See the chart for
ADI Inedexes above.)
Andrew Robartes (
arobartes@advantagedata.com).
| Key Gainers and Losers |
Volume Leaders |
| + |
Teck Resources LTD 6.25% 7/15/2041 |
+ 0.5% |
| |
United States STL Corp. New 6.25% 3/15/2026 |
+ 1.1% |
| - |
MGM Resorts Intl 5.75% 6/15/2025 |
-0.6% |
|
Marathon Oil Corp. 5.2% 6/1/2045
Petrobras Global Finance BV 7.375% 1/17/2027
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
0.03% |
0.51% |
1.16% |
4.55% |
7.83% |
8.70% |
| Mining |
0.08% |
-0.49% |
0.88% |
2.74% |
8.81% |
3.99% |
| Construction |
-0.03% |
-0.06% |
1.19% |
4.60% |
8.48% |
6.16% |
| Manufacturing |
0.08% |
-0.05% |
0.98% |
3.92% |
7.76% |
6.89% |
| Transportion, Communication, Electric/Gas |
0.04% |
0.18% |
1.24% |
4.73% |
7.84% |
7.32% |
| Wholesale |
-0.03% |
0.10% |
0.82% |
3.38% |
8.01% |
5.42% |
| Retail |
0.17% |
0.75% |
2.34% |
6.19% |
10.87% |
9.05% |
| Finance, Insurance, Real-Estate |
0.04% |
0.15% |
0.98% |
3.67% |
7.72% |
6.98% |
| Services |
0.02% |
0.07% |
0.85% |
3.59% |
7.99% |
7.57% |
| Public Administration |
0.43% |
0.64% |
0.84% |
3.19% |
6.80% |
12.52% |
| Energy |
0.05% |
-0.53% |
1.09% |
3.03% |
8.78% |
3.49% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
Forward Calendar |
|
(None Current 05/06/2019)
|
1. General Electric Distributed Power: $600M high-yield bonds, Expected Q2 2019
2. Calpine Corp.: $1.4B bonds, Expected Q2 2019
|
Additional Commentary
NEW ISSUANCE WATCH: on 5/3/19 participants welcome a $400MM new corporate-bond offering by Twin River Worldwide Hldgs. Inc. The most recent data showed money flowed into high-yield ETFs/mutual funds for the week ended 5/03/19, with a net inflow of $21.3MM, year-to-date $13.9B flowed into high-yield.
| Top Widening Credit Default Swaps (CDS) |
Top Narrowing Credit Default Swaps (CDS) |
Rite Aid Corp. (5Y Sen USD XR14)
Weatherford International LTD (5Y Sen USD MR14) |
Road King Infrastructure LTD (5Y Sen USD MR14)
Cable & Wireless Communication (5Y Sen USD CR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Twin River Management Group Inc., Lonsdale Finance Pty LTD, iHeartCommunications 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 14 bp (basis points), as of 05/06/19
- Net positive capital flows into high-yield ETFs & mutual funds
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