Investment Grade Bond Research - August 15, 2019

Posted by Pierre Robert on Aug 15, 2019 5:02:29 PM

THE 10 YEAR TREASURY FELL TO 1.52. US stock exchanges were mixed. The inverted treasury curve issue has caused all markets to fall significantly. Similarly, the 10-Year Treasury note fell to 1.52%. S&P -0.15%, DOW +0.38%, NASDAQ -0.27%.

GE STOCKS AND BONDS TOOK A MAJOR HIT! Allegations of accounting fraud by Harry Markopolos drove GE way down. 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, General Electric Co. (USD) 3.375% 3/11/2024 made analysts' 'Conviction sell lists. (See the chart for General Electric Co. below) Pierre Robert
Key Gainers and Losers Volume Leaders
+   Goldman Sachs Group Inc. VAR% 5/1/2029 + 0.4%
  Energy Transfer Partners LP 5.25% 4/15/2029 + 0.5%
-   General Electric Co. FLT% PERP (1) -6.1%
  GE Capital Intl. Funding Co. 3.373% 11/15/2025 -2.4%
General Electric Co.   FLT% PERP (1)
Shell Intl Finance BV   4% 5/10/2046
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.26% 0.12% 1.20% 3.20% 9.56% 9.05%
Mining 0.26% 0.78% 2.60% 5.51% 12.03% 10.63%
Construction 0.38% 0.23% 2.66% 5.95% 9.72% 9.27%
Manufacturing 0.37% 0.82% 3.32% 6.48% 11.07% 10.19%
Transportion, Communication, Electric/Gas 0.60% 1.01% 4.56% 8.14% 14.24% 13.57%
Wholesale 0.33% 0.53% 2.65% 5.18% 11.37% 10.30%
Retail 0.47% 0.93% 3.81% 7.17% 12.02% 11.72%
Finance, Insurance, Real-Estate 0.25% 0.50% 2.36% 4.61% 9.17% 9.52%
Services 0.40% 0.86% 3.23% 6.19% 10.58% 10.55%
Public Administration 0.04% 0.29% 1.30% 2.57% 4.57% 5.96%
Energy 0.25% 0.65% 2.61% 5.60% 12.25% 10.81%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-08-15T165753.058

New Issues New Issues [Continued]

1. Daimler Canada Finance (CAD) 2.54% 8/21/2023 (08/14/2019):400MM Senior Unsecured Notes, Price at Issuance 99.992, Yielding 2.54%.


Additional Commentary

NEW ISSUANCE WATCH: on 8/09/19 participants welcome $1000 million in new corporate-bond offerings by Barclay Bank. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 8/9/19, with a net outflow of $4 billion since October 2018.
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Rite Aid Corp. (5Y Sen USD MR14)
Hertz Corp. (5Y Sen USD CR14)
Ghana, Republic of (5Y Sen USD CR14)
Cable & Wireless Communication (5Y Sen USD CR14)

unnamed - 2019-08-12T171045.800

Loans and Credit Market Overview


Deals recently freed for secondary trading, notable secondary activity:
  • Duerre Group, Albertsons LLC, Helical PLC, London Stock Exchange Group PLC
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 23 bp (basis points), as of 08/15/19
  • Net positive capital flows into high-yield ETFs & mutual funds

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

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