Investment Grade Bond Research - August 26, 2019

Posted by Corey Mahoney on Aug 26, 2019 5:14:16 PM

U.S. DURABLE GOODS ORDERS JUMPED 2.1 PERCENT IN JULY strengthened by gains in the transportation sector due to an increase of aircraft orders from Boeing Excluding the transportation sectordurable goods slipped 0.4 percent. June’s results were revised significantly lower to 0.9 percent down from 1.5 percent. S&P +1.10%, DOW +1.05, NASDAQ +1.32%.

THE 10-YEAR NOTE HELD STEADY AT 1.537 PERCENT recovering from an early morning dip deepening the inversion between the two-and ten year notes to 1.7 basis points. Trade concerns have sent the markets whipsawing escalading investors’ fears resulting in volatility. Boeing bonds traded notably higher following the release durable goods were held up by aircraft sales.  ADI proprietary index data showed a net yield increment for high-grade versus high-yield bondsHigh-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded, Pitney Bowes Inc. (USD) 4.625% 3/15/2024 made analysts' 'Conviction Buy' list. (See the chart above for ADI Indices) Corey Mahoney
Key Gainers and Losers Volume Leaders
+   Wal-Mart Stores Inc. FLT% 6/23/2020 + 0.0%
  Express Scripts Holding Co. 3% 7/15/2023 + 0.9%
-   Oracle Corp. 1.9% 9/15/2021 -0.0%
  Comcast Corp. 4.7% 10/15/2048 -0.5%
Oracle Corp.   1.9% 9/15/2021
Synchrony Financial   3.95% 12/1/2027
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.20% -0.15% 1.12% 2.95% 9.70% 9.44%
Mining 0.42% 0.27% 2.86% 5.64% 12.56% 10.81%
Construction 0.26% -0.09% 2.88% 5.86% 10.59% 9.84%
Manufacturing 0.34% 0.23% 3.21% 6.50% 11.28% 9.93%
Transportion, Communication, Electric/Gas 0.41% 0.18% 4.22% 7.99% 14.62% 13.77%
Wholesale 0.28% 0.24% 2.32% 5.17% 11.77% 10.06%
Retail 0.46% 0.39% 3.79% 7.24% 12.72% 11.54%
Finance, Insurance, Real-Estate 0.25% 0.12% 2.28% 4.50% 9.39% 9.34%
Services 0.34% 0.22% 3.45% 6.53% 11.57% 10.90%
Public Administration 0.19% 0.04% 1.51% 2.59% 4.88% 5.99%
Energy 0.36% 0.29% 2.87% 5.73% 12.89% 12.24%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-08-26T171016.780

New Issues New Issues [Continued]

1. Texas Instruments Inc. (USD) 2.25% 9/4/2029 (08/26/2019):750MM Senior Unsecured Notes, Price at Issuance 99.689, Yielding 2.28%.

2. Canadian Imperial Bank of Commerce (CAD) 2.35% 8/28/2024 (08/26/2019): 1500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.35%.


Additional Commentary

NEW ISSUANCE WATCH: on 08/26/19 participants welcome a $750M new corporate-bond offering by
Texas Instruments Inc. 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 $4.07 billion.
Top Widening Credit Default Swaps (CDS) Top Narrowing Credit Default Swaps (CDS)
Weatherford International LTD (5Y Sen USD XR14)
Hertz Corp. (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD XR14)
San Miguel Corp. (5Y Sen USD CR14)

unnamed - 2019-08-01T153123.074

Loans and Credit Market Overview


Deals recently freed for secondary trading, notable secondary activity:
  • PaySimple Inc., Nike Inc., US Foods Inc., Duerre Group, Albertsons LLC, Helical 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 19 bp (basis points), as of 08/26/19
  • Net positive capital flows into high-yield ETFs & mutual funds

Copyright 2019 Advantage Data Inc. All Rights Reserved.

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: 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

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