THE U.S. ADDED 224,000 JOBS in June according the Department of Labor, surpassing the expected gain of 170,000. News of the report has eased economic worry and will likely affect the Federal Reserve’s decision to lower interest rates this month. As of now, some analysts predict a cut will happen later this year while others maintain there will be a 25-basis point cut at the end of the month. S&P -0.18%, DOW -0.16%, NASDAQ -0.10%.
U.S. STOCKS FELL THIS MORNING amidst the news of the above-expected job growth in June. The markets, however, recovered most of their losses this afternoon. 10-Year Treasury yields rose 9.2 basis points after settling below 2% on Wednesday. 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, Frontier Communications Corp. (USD) 8.5% 4/15/2020 made analysts' 'Conviction Buy' lists. (See the chart for ADI Indices above.) Andrew Robartes (arobartes@advantagedata.com).
| Key Gainers and Losers |
Volume Leaders |
| + |
Toyota Motor Credit Corp. VAR% 5/17/2022 |
+ 0.2% |
| |
Sumitomo Mitsui Banking Corp. FLT% 1/17/2020 |
+ 0.0% |
| - |
Williams Cos Inc. 5.75% 6/24/2044 |
-1.5% |
| |
Apple Inc. 3.45% 2/9/2045 |
-0.4% |
|
General Motors Co. 5.95% 4/1/2049
Cisco Systems Inc. 2.2% 2/28/2021
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
0.19% |
0.52% |
1.90% |
4.23% |
9.08% |
5.27% |
| Mining |
0.08% |
0.61% |
2.13% |
4.07% |
9.58% |
9.20% |
| Construction |
0.05% |
0.65% |
1.87% |
4.79% |
7.65% |
8.27% |
| Manufacturing |
0.06% |
0.59% |
2.11% |
4.49% |
8.13% |
8.05% |
| Transportion, Communication, Electric/Gas |
0.13% |
0.84% |
2.43% |
5.68% |
10.38% |
10.94% |
| Wholesale |
0.03% |
0.54% |
1.77% |
4.27% |
8.66% |
8.63% |
| Retail |
0.01% |
0.53% |
2.10% |
4.45% |
8.49% |
9.10% |
| Finance, Insurance, Real-Estate |
0.04% |
0.35% |
1.29% |
3.44% |
6.80% |
7.97% |
| Services |
0.02% |
0.52% |
1.80% |
4.38% |
7.86% |
8.97% |
| Public Administration |
0.07% |
0.17% |
0.45% |
2.27% |
3.36% |
4.76% |
| Energy |
0.07% |
0.71% |
2.12% |
4.24% |
9.90% |
9.84% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
New Issues [Continued] |
|
(None Current 07/05/2019)
|
|
Additional Commentary
NEW ISSUANCE WATCH: on 7/1/19 participants welcome a $290MM new corporate-bond offering by Chaudiere Financial LP. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 6/21/19, with a net outflow of $602MM, year-to-date $8.9B flowed into high-yield.
| 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 MR14)
Atmos Energy Corp. (5Y Sen USD MR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Goshawk Aviation Ltd, Valence Surface Technologies, Moneygram Intl. Inc.
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 10 bp (basis points), as of 07/05/19
- Net positive capital flows into high-yield ETFs & mutual funds
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