EQUITIES STRUGGLED EARLY ON following weak factory data from china initiating once again fears of a global recession, producer prices shrank 0.8 percent in August. “A slowdown in China is clearly a sign that global deceleration of economic activity is real and is something we’re going to have to deal with.” The 10-year note rose 4.4 basis points. S&P +0.03%, DOW +0.26, NASDAQ +0.04%.
BOEING REPORTED DELIVERIES ARE DOWN 72 PERCENT in August from one year ago amid grounding its 737 MAX fleet. The plane manufacturer only delivered 18 aircraft in August compared to 64 a year prior. Boeing anticipates the FAA will recertify the 737 MAXX planes by October allowing the aircraft to fly after six months of being grounded. The number of job openings slipped in July as the number of private-sector employees leaving their jobs rose to 2.6 percent matching 2008 highs. 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, Frontier Communications Corp. (USD) 7.625% 4/15/2024 made analysts' 'Conviction Buy' list (See the chart below for Frontier Communications Corp. bonds below) Corey Mahoney
| Key Gainers and Losers |
Volume Leaders |
| + |
Pacific Gas & Electric Co. 6.05% 3/1/2034 |
+ 0.7% |
| |
Teva Pharmaceutical Industries LTD 3.15% 10/1/2026 |
+ 0.7% |
| - |
Dish DBS Corp. 7.75% 7/1/2026 |
-0.0% |
|
General Motors Co. 5.2% 4/1/2045
Antero Resources Finance Corp. 5.375% 11/1/2021
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
0.05% |
0.94% |
1.92% |
7.23% |
14.35% |
16.59% |
| Mining |
0.14% |
-0.14% |
0.79% |
-2.25% |
5.16% |
0.10% |
| Construction |
-0.05% |
0.21% |
1.75% |
4.60% |
14.10% |
11.11% |
| Manufacturing |
-0.03% |
-0.05% |
1.03% |
2.43% |
10.38% |
7.53% |
| Transportion, Communication, Electric/Gas |
-0.02% |
0.12% |
1.27% |
3.71% |
12.73% |
9.47% |
| Wholesale |
-0.04% |
0.08% |
0.87% |
2.74% |
11.36% |
7.82% |
| Retail |
0.02% |
0.43% |
1.45% |
2.97% |
13.85% |
10.31% |
| Finance, Insurance, Real-Estate |
-0.07% |
0.21% |
1.31% |
3.83% |
12.30% |
9.93% |
| Services |
-0.03% |
0.22% |
1.35% |
3.16% |
11.44% |
8.70% |
| Public Administration |
-0.28% |
-0.27% |
1.03% |
4.94% |
12.79% |
16.89% |
| Energy |
0.04% |
-0.19% |
1.16% |
-1.13% |
6.61% |
1.21% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
Forward Calendar |
|
1. Triumph Group Inc. (USD) 6.25% 9/15/2024 (09/10/2019): 525MM Secured Notes, Price at Issuance 100, Yielding 6.25%.
2. Cheniere Energy Inc. (USD) 4.5% 10/1/2029 (09/10/2019): 1500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.5%.
|
1. Diamondback Energy Inc.: High-yield notes, Expected Q3 2019
2. Calpine Corp.: $1.4B bonds, Expected Q3 2019
|
Additional Commentary
NEW ISSUANCE WATCH: on 09/10/19 participants welcome a $525M new corporate-bond offering by
Triumph Group Inc .
The most recent data showed a significant flow into fixed income ETFs for the month of August, with a net inflow of $14.0 billion.
| 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) |
SuperValu Inc. (5Y Sen USD MR14)
San Miguel Corp. (5Y Sen USD CR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Beazer Homes USA Inc., Murphy Oil USA Inc., Electronic Arts Inc., AutoData
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 19 bp (basis points), as of 09/10/19
- Net positive capital flows into high-yield ETFs & mutual funds
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