JUNK BONDS ROSE AGAINST INVESTMENT GRADE DEBT as investors anticipate a sound jobs report showing growth despite the rocky start to 2019. Gold edged lower as positive Chinese economic data revealed industrial firms reported a rise in profits for the first time in four months. The S&P 500 and NASDAQ closed at record highs lifted by more positive earnings. The 10-year note rose 2.6 basis points. S&P +0.11%, DOW +0.04%, NASDAQ +0.19%.

CONSUMER SPENDING ROSE BY 0.7 PERCENT in March aided by an uptick in vehicle purchases and January’s number was revised up to 0.3 percent. “The economy is in a sweet spot for now with not enough inflation to cause the Fed to raise rates, and with inflation not low enough to worry Fed officials that economic demand is weakening, which could require rate cuts”.  Inflation held steady at 1.6 percent according to the Personal Consumer Expenditures (PCE) Price Index. 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,   Barclays PLC (USD) 4.375% 9/11/2024  made analysts' 'Conviction Buy' lists. (See the chart for  ADI Indexes above) Corey Mahoney cmahoney@advantagedata.com).

 

Key Gainers and Losers	Volume Leaders
+   Ford Motor Credit Co. 3.336% 3/18/2021 + 0.0%   JP Morgan Chase & Co. 3.25% 9/23/2022 + 0.2% -   Newell Rubbermaid Inc. 4.2% 4/1/2026 -0.9%	Toyota Motor Credit Corp.   1.95% 4/17/2020 Baker Hughes Inc.   4.08% 12/15/2047

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.06% 0.21% 0.43% 3.74% 4.82% 4.68% Mining 0.07% 0.21% 0.73% 4.15% 6.06% 6.52% Construction 0.14% 0.44% 0.57% 3.72% 4.37% 5.51% Manufacturing 0.14% 0.28% 0.49% 3.43% 4.46% 5.36% Transportion, Communication, Electric/Gas 0.13% 0.32% 0.75% 4.66% 5.64% 6.78% Wholesale 0.12% 0.32% 0.58% 3.77% 5.31% 5.69% Retail 0.10% 0.24% 0.34% 3.53% 4.59% 5.83% Finance, Insurance, Real-Estate 0.12% 0.26% 0.40% 3.04% 3.95% 5.75% Services 0.14% 0.32% 0.34% 3.21% 4.26% 6.27% Public Administration 0.08% 0.24% 0.11% 1.35% 1.28% 3.97% Energy 0.09% 0.23% 0.73% 4.47% 6.33% 6.95%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
(None Current 04/29/2019)

NEW ISSUANCE WATCH: on 4/26/19 participants welcome a $75MM new corporate-bond offering by
Sector RE V LTD.  The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 4/26/19, with a net outflow of $0.520B, year-to-date $13.8B flowed into high-yield.

 

Top Widening Credit Default Swaps (CDS)	Top Narrowing Credit Default Swaps (CDS)
Hertz Corp. (5Y Sen USD CR14) Hovnanian Enterprises Inc. (5Y Sen USD MR14)	Cable & Wireless Communication (5Y Sen USD CR14) San Miguel Corp. (5Y Sen USD CR14)

Loans and Credit Market Overview

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:

• JBS USA LLC, Sundyne US Purchaser, Prysmian, Project Maple II BV, Trade Me Group LTD

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 17 bp (basis points), as of 04/29/19
• 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.