ATTENTION WILL FOCUS ON THE FED’S two-day meeting this week concluding with a monetary policy statement on Wednesday.  A recent survey indicated 40 percent of economists polled expect the Fed to ease economic policy next month.  Over the past 30 days, the 10-year note fell 45 basis points following tariff uncertainties and slowing economic data.  The 10-year note held steady losing 0.4 basis points.  Gold slips from 14-month highs, however, continues to see significant inflows as investors flee to the safe-haven asset. S&P +0.16%, DOW +0.15, NASDAQ +0.69%.

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VOLATILITY IN THE BOND MARKET SURGES to levels not seen in nearly 3-years amid the recent soft employment report.  Tom di Galoma managing director at Seaport Global Securities stated,   “Bond markets are seeing something that equity markets are not”.  The manufacturing confidence in New York tumbled into negative territory recording the largest drop ever plummeting 26.4 points.  Economists “raise the caution flag” that other manufacturing data may come in weaker than expected this month as the imposing tariffs take a toll on the economy. ADI proprietary index data showed a net yield increment for high-yield versus high-grade bonds. High-grade edged out high-yield.  Among high-grade bonds showing topmost price gains at appreciable volumes traded, Canadian Pacific Railroad Co. (USD) 4.8% 8/1/2045 made analysts' 'Conviction Buy' lists. (See the chart for Canadian Pacific Railroad Co. bonds below.) Corey Mahoney (cmahoney@advantagedata.com).

 

Key Gainers and Losers	Volume Leaders
+   Verizon Communications Inc. 4.125% 3/16/2027 + 0.1%   CVS Health Corp. 5.05% 3/25/2048 + 0.3% -   Cisco Systems Inc. 2.2% 2/28/2021 -0.1%	CVS Health Corp.   4.78% 3/25/2038 Mitsubishi UFJ Financial Group Inc.   2.95% 3/1/2021

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.08% 0.30% 2.03% 4.43% 7.64% 5.15% Mining -0.04% 0.06% 1.17% 3.47% 7.30% 7.22% Construction 0.03% 0.18% 1.92% 4.03% 6.18% 7.21% Manufacturing -0.04% 0.08% 1.64% 3.74% 6.16% 6.65% Transportion, Communication, Electric/Gas -0.04% -0.03% 1.93% 4.87% 7.87% 9.49% Wholesale -0.07% 0.02% 1.39% 3.83% 7.19% 7.25% Retail -0.05% 0.08% 1.67% 3.77% 6.46% 6.91% Finance, Insurance, Real-Estate -0.02% 0.02% 1.30% 3.13% 5.61% 7.11% Services -0.03% 0.06% 1.88% 3.78% 6.27% 7.63% Public Administration -0.02% -0.07% 1.03% 2.31% 3.01% 4.91% Energy -0.05% -0.00% 1.23% 3.61% 7.59% 9.27%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
1. ERP Operating LTD Partnership (USD) 3% 7/1/2029 (06/17/2019):600MM Senior Unsecured Notes, Price at Issuance 99.58, Yielding 3.05%. 2. Jackson National Life Global Funding (USD) 3.05% 6/21/2029 144A (06/17/2019): 300MM Secured Notes, Price at Issuance 99.726, Yielding 3.08%.

NEW ISSUANCE WATCH: on 6/17/19 participants welcome a $500MM new corporate-bond offering by
KKR Group Finance Co. VI. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 6/14/19, with a net outflow of $1.7B, year-to-date $8.3B 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)	Cable & Wireless Communication (5Y Sen USD CR14) Atmos Energy Corp. (5Y Sen USD MR14)

Loans and Credit Market Overview

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:

• US Renal Care Inc., Perforce Software Inc., Avantor Performance Materials 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 23 bp (basis points), as of 06/17/19
• Net positive capital flows into high-yield ETFs & mutual funds

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