INVESTMENT-GRADE BONDS LURE over $3.65 billion of net inflows in the week ending on Wednesday marking the third consecutive week of inflows. Analysts expect the inflows to continue as the Fed’s dovish tone suggested interest rates will rise in the future. Gold jumped nearly 4 percent approaching 5-year highs as the Fed deviated from the “patient” stance on monetary policy. The 10-year note fell 0.06 basis points. S&P +0.95%, DOW +0.94, NASDAQ +0.80%.
JOBLESS CLAIMS DECLINED last week signaling the labor market remains strong despite a slowing in hiring.Claims fell to by 6,000 for a seasonally adjusted total of 216,000 surpassing estimates of 220,000. “For all of the angst around the May jobs report and the potential that job creation is stalling, it bears repeating: Jobless claims are still quite low, and show no signs of sustained deterioration.”Crude oil soars over 5 percent after Iran shoots down a US military surveillance drone over the Strait of Hormuz. In addition, US crude supplies fell by 3.1 million barrels for the week ending on June 14th. 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, eBay Inc. (USD) 4% 7/15/2042 made analysts' 'Conviction Buy' lists. (See the chart for eBay Inc. bonds below.) Corey Mahoney (cmahoney@advantagedata.com).
| Key Gainers and Losers |
Volume Leaders |
| + |
General Electric Co. FLT% PERP (1) |
+ 0.8% |
| |
GE Capital Intl. Funding Co. 4.418% 11/15/2035 |
+ 1.3% |
| - |
Bank of America Corp. FLT% 2/5/2026 |
-0.7% |
|
MPLX LP 5.5% 2/15/2049
General Electric Co. FLT% PERP (1)
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
0.26% |
0.69% |
2.55% |
4.63% |
8.12% |
5.25% |
| Mining |
0.22% |
0.59% |
1.48% |
3.73% |
7.86% |
7.81% |
| Construction |
0.30% |
0.60% |
2.36% |
4.48% |
7.05% |
7.69% |
| Manufacturing |
0.16% |
0.64% |
2.02% |
4.12% |
6.74% |
7.06% |
| Transportion, Communication, Electric/Gas |
0.20% |
0.84% |
2.45% |
5.31% |
8.64% |
10.08% |
| Wholesale |
0.22% |
0.49% |
1.65% |
4.02% |
7.57% |
7.60% |
| Retail |
0.13% |
0.73% |
2.10% |
4.18% |
7.11% |
7.45% |
| Finance, Insurance, Real-Estate |
0.15% |
0.46% |
1.59% |
3.39% |
6.04% |
7.33% |
| Services |
0.14% |
0.66% |
2.17% |
4.13% |
6.82% |
8.08% |
| Public Administration |
0.30% |
0.30% |
1.29% |
2.42% |
3.22% |
4.95% |
| Energy |
0.21% |
0.59% |
1.54% |
3.84% |
8.18% |
9.80% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
New Issues [Continued] |
|
1. Spirit Realty LP (USD) 4% 7/15/2029 (06/20/2019): 400MM Senior Unsecured Notes, Price at Issuance 99.924, Yielding 4.01%.
2. HCP Inc. (USD) 3.25% 7/15/2026 (06/20/2019): 650MM Senior Unsecured Notes, Price at Issuance 99.906, Yielding 3.26%.
|
|
Additional Commentary
NEW ISSUANCE WATCH: on 6/20/19 participants welcome a $400MM new corporate-bond offering by Spirit Realty LP. 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)
San Miguel Corp. (5Y Sen USD CR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Hilton Worldwide Finance LLC, US Renal Care Inc., Perforce Software 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 06/20/19
- Net positive capital flows into high-yield ETFs & mutual funds
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