Investment Grade Bond Research - August 6, 2019

Posted by Pierre Robert on Aug 6, 2019 5:08:28 PM

MARKETS HAVE STABILIZED AFTER CHINA STATED the Yuan will not go below 7 Yuan per dollar. Sovereign curves world-wide stabilized. Markets worldwide have stabilized. No-Brexit deal is currently swirling around and maybe the deal that needs to be hammered out before an October exit. The 10-Year Treasury note was at 1.721. S&P +1.64%, DOW +1.21%, NASDAQ +1.39%.

JC PENNY BONDS had a second day high volume trading. JC Penny stock has lost almost 20% in the past 5 days and investors are turning skeptical about the companies ability to turn itself around with over $4 billion in debt on its books. 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, DTE Electric Co. (USD) 3.7% 6/1/2046 made analysts' 'Conviction Buy' lists. (See the chart for DTE Electric Co.below.) Pierre Robert
Key Gainers and Losers Volume Leaders
+   HCA Inc. 7.5% 2/15/2022 + 0.2%
  HCA Inc. 5.375% 2/1/2025 + 0.0%
-   Teva Pharmaceutical Industries LTD 3.15% 10/1/2026 -0.1%
  ZF North America Capital Inc. 4.75% 4/29/2025 Reg S -0.5%
Chesapeake Energy Corp.   8% 1/15/2025
Sprint Nextel Corp.   7.875% 9/15/2023
Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing 0.54% 0.94% 0.50% 3.80% 9.51% 9.36%
Mining 0.34% 1.04% 1.03% 4.62% 11.07% 9.94%
Construction 0.53% 1.37% 1.84% 5.34% 8.58% 8.58%
Manufacturing 0.36% 1.12% 1.52% 5.09% 9.39% 8.79%
Transportion, Communication, Electric/Gas 0.62% 1.71% 2.15% 6.60% 12.42% 12.61%
Wholesale 0.36% 0.97% 1.39% 4.53% 9.60% 9.24%
Retail 0.44% 1.29% 1.73% 5.73% 10.24% 10.04%
Finance, Insurance, Real-Estate 0.30% 0.91% 1.25% 3.95% 8.01% 8.59%
Services 0.40% 1.15% 1.49% 5.29% 9.35% 9.59%
Public Administration 0.36% 0.74% 0.81% 2.45% 4.09% 5.73%
Energy 0.37% 1.01% 1.08% 4.66% 11.33% 11.46%
Total returns (non-annualized) by rating, market weighted.

unnamed - 2019-08-06T170303.435

New Issues New Issues [Continued]


Additional Commentary

NEW ISSUANCE WATCH: on 8/06/19 participants welcome $550 million in new corporate-bond offerings by Public Service Co. of Colorado  The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 8/2/19, with a net outflow of $115 MM, $1.3 billion outflow the prior week.
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)
Road King Infrastructure LTD (5Y Sen USD CR14)
SuperValu Inc. (5Y Sen USD MR14)

unnamed - 2019-08-01T153123.074

Loans and Credit Market Overview


Deals recently freed for secondary trading, notable secondary activity:
  • Helical PLC, London Stock Exchange Group PLC, Maxamcorp Holding SL
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 21 bp (basis points), as of 08/06/19
  • 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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