US INVESTMENT GRADE DEBT ROSE AGAINST JUNK BONDS in net prices linked to actual trades after the European Central Bank President Mario Draghi announced the possibility of more stimulus if inflation stays low. US Treasury prices rallied for the second day as the Fed kicks off its two-day meeting. The 10-year note dipped 3.2 basis points. S&P +0.98%, DOW +1.36, NASDAQ +1.42%.
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US HOUSING STARTS DECLINE IN MAY revealing the latest weakness in the housing market following a
weak builder confidence report earlier this month. In spite of
the 0.9 percent drop, the Fed revised April’s and May’s data indicating
more housing starts than previously reported. The construction industry is facing a
significant labor shortage preventing builders to take advantage of low-interest rates and a tight housing market.
Crude oil spiked on Tuesday rising
4.14 percent as investors become
optimistic over the US and China making progress following communication from the White House.
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,
Transcontinental Gas Pipe Corp. (USD) 5.4% 8/15/2041 made analysts' 'Conviction Buy' lists. (See the chart for
Transcontinental Gas Pipe Corp. bonds below.)
Corey Mahoney (
cmahoney@advantagedata.com).
| Key Gainers and Losers |
Volume Leaders |
| + |
GE Capital Intl. Funding Co. 4.418% 11/15/2035 |
+ 1.0% |
| |
UnitedHealth Group Inc. 3.5% 2/15/2024 |
+ 0.9% |
| - |
JPMorgan Chase & Co. 4.625% PERP |
-0.8% |
|
Shell Intl. Finance BV 1.75% 9/12/2021
Dowdupont Inc. 4.725% 11/15/2028
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
0.03% |
0.43% |
2.14% |
4.19% |
7.66% |
5.14% |
| Mining |
-0.02% |
0.12% |
0.98% |
3.32% |
7.30% |
7.24% |
| Construction |
0.05% |
0.39% |
1.82% |
3.88% |
6.30% |
7.13% |
| Manufacturing |
0.04% |
0.26% |
1.54% |
3.62% |
6.26% |
6.62% |
| Transportion, Communication, Electric/Gas |
0.06% |
0.30% |
1.81% |
4.71% |
7.95% |
9.39% |
| Wholesale |
-0.07% |
0.10% |
1.29% |
3.72% |
7.22% |
7.14% |
| Retail |
0.05% |
0.37% |
1.56% |
3.59% |
6.43% |
6.87% |
| Finance, Insurance, Real-Estate |
-0.00% |
0.20% |
1.24% |
3.04% |
5.71% |
7.09% |
| Services |
0.02% |
0.31% |
1.70% |
3.60% |
6.25% |
7.61% |
| Public Administration |
0.00% |
0.15% |
1.09% |
2.22% |
2.99% |
4.87% |
| Energy |
-0.03% |
0.05% |
0.99% |
3.36% |
7.61% |
9.14% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
New Issues [Continued] |
|
1. 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%.
2. Jackson National Life Global Funding (USD) 2.65% 6/21/2024 144A (06/17/2019): 300MM Secured Notes, Price at Issuance 99.805, Yielding 2.69%.
|
|
Additional Commentary
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) |
Hertz Corp. (5Y Sen USD XR14)
Hovnanian Enterprises Inc. (5Y Sen USD MR14) |
SuperValu Inc. (5Y Sen USD XR14)
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 06/18/19
- Net positive capital flows into high-yield ETFs & mutual funds
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