Investment Grade Bond Research - April 15, 2019

INVESTORS WILL KEEP A KEEN EYE ON EARNINGS AND ECONOMIC DATA THIS WEEK, watching for any reason to short the market. Chief Market Strategist Quincy Krosby affirmed “Every data release will be monitored and scrutinized by analysts to see if there are stronger underpinnings for the economy”.  On Tuesday the U.S. Federal Reserve releases industrial growth, a critical gauge indicating the direction of the economy. Analysts expect industrial production to have recovered in March. ADI proprietary index data showed a net yield increment for high-yield versus high-grade bonds.  High-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded,  Pacific Gas & Electric Co. (USD) 5.4% 1/15/2040 made analysts' 'Conviction Buy' lists. (See the chart for ADI indices above.) Corey Mahoney cmahoney@advantagedata.com).

 

Key Gainers and Losers	Volume Leaders
+   Jackson National Life Global Funding 2.25% 4/29/2021 144A + 0.1%   TTX Co. 2.6% 6/15/2020 144A + 0.0% -   Broadcom LTD 3.625% 10/15/2024 144A -0.2%	Broadcom LTD   3.625% 10/15/2024 144A HP Enterprise Services LLC   2.1% 10/4/2019 144A

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.54% 0.23% 1.44% 4.26% 4.31% 4.42% Mining -0.09% 0.20% 1.69% 4.58% 5.76% 4.51% Construction -0.20% -0.15% 1.27% 3.32% 3.77% 4.20% Manufacturing -0.12% 0.17% 1.38% 3.63% 3.96% 3.91% Transportion, Communication, Electric/Gas -0.14% 0.14% 1.71% 4.70% 5.16% 5.09% Wholesale -0.10% 0.10% 1.19% 3.93% 4.41% 3.96% Retail -0.14% 0.12% 1.33% 3.89% 4.25% 4.15% Finance, Insurance, Real-Estate -0.12% 0.06% 0.89% 3.22% 3.42% 4.58% Services -0.14% 0.09% 1.27% 3.57% 3.96% 4.65% Public Administration -0.11% -0.05% 0.35% 0.97% 0.97% 3.24% Energy -0.12% 0.17% 1.66% 4.88% 5.89% 5.08%   Total returns (non-annualized) by rating, market weighted.

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:

• Six Flags Inc., MW Industries Inc., Ultimate Software Group, Crossamerica Partners LP

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 18 bp (basis points), as of 04/15/19
• Net positive capital flows into high-yield ETFs & mutual funds

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