JOBLESS CLAIMS PLUMMET TO 5-MONTH LOWS suggesting the labor market remains strong despite the deteriorating job growth. Claims fell by 15,000 reporting a seasonally adjusted total of 204,000 applications. The 10-year note rose 3.9 basis points. S&P +0.50%, DOW +0.39, NASDAQ +0.58%.
INFLATION EDGED HIGHER CLIMBING toward the Fed’s target rate of 2 percent reflecting a substantial drop in gasoline prices. Analysts expect the Federal Reserve to cut rates later this month. “The market has been hyper-sensitive to any issues on trade and if we get any whiff of a hint that there may be some progress, that’s viewed positively.” 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, Noble Holding Intl. LTD (USD) 5.95% 4/1/2025 made analysts' 'Conviction Buy' list (See the chart below for Noble Holding Intl. LTD bonds below) Corey Mahoney
| Key Gainers and Losers |
Volume Leaders |
| + |
Teva Pharmaceutical Industries LTD 2.2% 7/21/2021 |
+ 0.6% |
| |
AK Steel Holding Corp. 7% 3/15/2027 |
+ 0.7% |
| - |
Echostar Communications Corp. 5% 3/15/2023 |
-2.0% |
|
Frontier Communications Corp. 10.5% 9/15/2022
Teva Pharmaceutical Industries LTD 2.2% 7/21/2021
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
0.04% |
0.33% |
1.62% |
6.39% |
14.13% |
17.02% |
| Mining |
-0.04% |
0.95% |
1.80% |
-1.41% |
6.39% |
1.26% |
| Construction |
-0.10% |
0.06% |
1.68% |
4.21% |
13.87% |
10.58% |
| Manufacturing |
-0.05% |
-0.05% |
1.13% |
2.29% |
10.56% |
7.66% |
| Transportion, Communication, Electric/Gas |
-0.08% |
-0.04% |
1.03% |
3.58% |
13.07% |
10.19% |
| Wholesale |
-0.06% |
0.15% |
0.88% |
2.21% |
11.99% |
7.58% |
| Retail |
0.03% |
0.41% |
1.54% |
2.10% |
13.86% |
9.83% |
| Finance, Insurance, Real-Estate |
-0.10% |
0.02% |
1.35% |
3.72% |
12.54% |
10.41% |
| Services |
-0.07% |
0.20% |
1.48% |
3.06% |
12.11% |
9.37% |
| Public Administration |
-0.18% |
-0.47% |
0.83% |
4.09% |
12.60% |
16.79% |
| Energy |
-0.06% |
0.69% |
1.89% |
-0.75% |
7.28% |
1.86% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
Forward Calendar |
|
1. Level 3 Financing Inc. (USD) 4.625% 9/15/2027 Reg S (09/11/2019): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.63%.
2. KeHE Distributors (USD) 8.625% 10/15/2026 Reg S (09/11/2019): 200MM Second Lien Notes, Price at Issuance 100, Yielding 8.63%.
|
1. Calpine Corp.: $1.4B bonds, Expected Q3 2019
2. Atlantica Tender Drilling Ltd: $140MM, Expected Q3 2019
|
Additional Commentary
NEW ISSUANCE WATCH: on 09/12/19 participants welcome a $750M new corporate-bond offering by
Wynn Resorts LTD . 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) |
Rite Aid Corp. (5Y Sen USD MR14)
Weatherford International LTD (5Y Sen USD XR14) |
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:
- YRC Worldwide Inc., Busy Bees Group LTD, Beazer Homes USA Inc, Murphy Oil USA Inc.
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 18 bp (basis points), as of 09/12/19
- Net positive capital flows into high-yield ETFs & mutual funds
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