TD BANK GROUP REPORTED UPBEAT EARNINGS reflecting a 13 percent rise in the retail segment, overall quarterly profits increased by 4.7 percent. Chief executive Bharat Masrani made a dovish remark on business conditions, “As we head into the final quarter of the year, the macroeconomic environment has become less supportive.” The 10-year note advanced 2.1 basis points. S&P +1.32%,DOW +1.30, NASDAQ +1.51%.

U.S. PRIVATE CREDIT FUNDS ARE PREPARING for the next economic downturn shifting portfolios into defensive strategies. Business Development Companies (BDCs) have used the Small Business Credit Availability Act which allowed for an increase of leverage to rotate portfolios reducing risk. “In a fund with leverage, it is critically important to understand the credit risk of the underlying investments.” ADI proprietary index data showed a net yield increment for high-grade versus high-yield bonds. High-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded, Pacific Gas & Electric Co. (USD) 4.5% 12/15/2041 made analysts' 'Conviction Buy' list. (See the chart below for ADI bonds above.) Corey Mahoney

 

Key Gainers and Losers	Volume Leaders
+   Verizon Communications Inc. 4.672% 3/15/2055 (1) + 0.6%   Apple Inc. 1.8% 5/11/2020 + 0.1% -   JPMorgan Chase & Co. 3.9% 7/15/2025 -0.4%	CVS Health Corp.   5.05% 3/25/2048 Altria Group Inc.   5.95% 2/14/2049

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.23% 0.21% 1.33% 2.68% 9.84% 9.54% Mining -0.07% 0.41% 2.89% 5.75% 12.77% 11.20% Construction 0.06% 0.54% 3.03% 6.23% 11.07% 10.74% Manufacturing -0.02% 0.46% 3.37% 6.55% 11.36% 10.33% Transportion, Communication, Electric/Gas 0.04% 0.74% 4.54% 8.31% 15.20% 14.16% Wholesale 0.04% 0.38% 2.47% 5.30% 12.05% 10.60% Retail -0.05% 0.58% 4.07% 7.52% 13.07% 12.13% Finance, Insurance, Real-Estate -0.01% 0.36% 2.49% 4.63% 9.51% 9.72% Services -0.03% 0.46% 3.69% 6.65% 11.82% 11.43% Public Administration 0.02% 0.19% 1.49% 2.47% 4.76% 5.97% Energy -0.07% 0.46% 2.98% 5.87% 13.09% 11.31%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
(None Current 08/29/2019)

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)
Hertz Corp. (5Y Sen USD XR14) Hovnanian Enterprises Inc. (5Y Sen USD MR14)	Cable & Wireless Communication (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD MR14)

Loans and Credit Market Overview

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:

• AutoData, PaySimple Inc., Nike Inc., US Foods Inc., Duerre Group, Albertsons LLC

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 14 bp (basis points), as of 08/29/19
• Net positive capital flows into high-yield ETFs & mutual funds

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