High Yield Bond Research - September 4, 2019

Posted by Corey Mahoney on Sep 4, 2019 5:18:31 PM
U.S. TRADE GAP SHRANK IN JULY as exports rebound causing the deficit to decline by 2.7 percent. Industrial supplies lead the drop in imports falling by 7.4 percent month over month. “The ongoing trade war between the world’s largest economies has hurt China perhaps more than the U.S. but a few signs of a slowdown have now emerged in the U.S. too.” The 10-year note lost 0.4 basis points. S&P+0.84%, DOW +0.68, NASDAQ +1.09%.
CRUDE OIL SURGES 4.38 PERCENT as analysts forecast a reduction in U.S. supplies following uplifting economic data reporting China’s service sector expanded at a faster than anticipated. In the U.S. supplies declined for the third straight week. “Oil prices however remain focused on the trade war and the longer we don’t see a date scheduled for a face-to-face meeting between Chinese and U.S.” ADI proprietary index data showed a net yield increment for high-grade versus high-yield bondsHigh-grade edged out high-yield. Among high-grade bonds showing topmost price gains at appreciable volumes traded, Florida Power & Light (USD) 5.125% 6/1/2041 made analysts' 'Conviction Buy' list (See the chart below for ADI  bonds above.) Corey Mahoney
 
Key Gainers and Losers Volume Leaders
+   Petrobras Global Finance BV 7.375% 1/17/2027 + 0.4%
  JC Penney Co. Inc. 7.625% 3/1/2097 + 8.4%
-   Sprint Capital Corp. 8.75% 3/15/2032 -0.1%
Sprint Capital Corp.   8.75% 3/15/2032
Whiting Petroleum Corp.   6.25% 4/1/2023 144A
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -0.07% 0.38% 1.11% 6.97% 12.69% 14.29%
Mining -0.57% -0.60% -2.79% -2.43% 4.79% -0.59%
Construction -0.21% 0.08% 1.29% 5.17% 13.83% 10.14%
Manufacturing -0.14% 0.03% 0.85% 3.38% 10.26% 7.25%
Transportion, Communication, Electric/Gas -0.16% -0.04% 0.90% 4.44% 12.91% 9.63%
Wholesale -0.15% 0.20% 0.33% 3.49% 11.30% 7.07%
Retail -0.18% 0.16% 0.64% 3.74% 13.98% 10.47%
Finance, Insurance, Real-Estate -0.11% 0.02% 0.71% 4.36% 11.93% 9.68%
Services -0.15% 0.05% 0.84% 3.87% 11.28% 8.64%
Public Administration -0.18% 0.03% 0.83% 5.37% 12.90% 17.37%
Energy -0.53% -0.69% -2.19% -1.78% 5.80% 0.35%
 
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-09-04T171534.245

New Issues Forward Calendar



(None Current 09/04/2019)

 

1. General Electric Distributed Power: $600M high-yield bonds, Expected Q3 2019

2. Diamondback Energy Inc.: High-yield notes, Expected Q3 2019

Additional Commentary


NEW ISSUANCE WATCH: on 09/03/19 participants welcome a $500M new corporate-bond offering by
Deere & Co. 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)
Weatherford International LTD (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD XR14)
Cable & Wireless Communication (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14)

unnamed - 2019-08-01T153117.188

Loans and Credit Market Overview


SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, 
notable secondary activity: 
  • Electronic Arts Inc., AutoData, PaySimple Inc., Nike Inc., US Foods Inc., Duerre Group
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 18 bp (basis points), as of 09/04/19
  • Net positive capital flows into high-yield ETFs & mutual funds 

Copyright 2019 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com

Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.

Topics: Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, News, Syndicated Bonds, syndicated, research, market update


Are you using AdvantageData?

AdvantageData is your fixed income solution for pricing, analytics, reports, and insight on approximately:

  • 500,000+ U.S. and international corporate bonds
  • Over 6,200+ CDS reference entities
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 16 products and services from debt to CDS to loans to mid-market
  • Used by top buy and sell-side firms worldwide

Subscribe to Email Updates

Recent Posts