EQUITIES CLIMBED HIGHER as a possible U.S. and China trade agreement could soon be accomplished. Beijing’s top central banker stated, “China had agreed not to devalue its currency to support its exporters.” Shares of Boeing contracted after a 737 operated by an Ethiopian airline crashed when taking off from the capital of Addis Ababa on Sunday. U.S. consumers ramped up their spending in February on durable and non-durable goods, a sign of economic growth in Q1 of 2019. The 10-year U.S. Treasury note increased 0.5 basis points and the 30-year note rose 1.4 basis points. S&P +1.25%, Dow +0.70%, NASDAQ +1.84%.
DEMAND FOR GOVERNMENT BONDS IS GROWING AS INVESTORS weigh the Fed’s next interest-rate moves. Powell stated, “the current interest-rate setting is neutral.” The main risk to the U.S. economy is
slower growth in China and Europe, which could derail U.S. economic growth. Risk assets are seeing
favorable capital inflow, as inflation and prices of goods are on the
uptick. Powell thinks the markets are
“fairly valued” to the current economic data. Tesla will keep more car stores open, but will increase car prices by 3% to offset
additional expenses.
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,
Alcoa Inc. (USD) 5.95% 2/1/2037 made analysts' 'Conviction Buy' lists. (See the chart for
Alcoa Inc. bonds below)
Niral Mehta (
nmehta@advantagedata.com).
NEW ISSUANCE WATCH: on 3/11/19 participants welcome a $487MM new corporate-bond offering by
Helmerich & Payne Intl. Drilling Co. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 3/8/2019, with a net outflow of $1.69B, year-to-date $7.8B flowed into high-yield.
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- MYOB LTD, Dell International, Amer Sports Corp., Orchid Orthopedic Solutions, Neustar 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 16 bp (basis points), as of 03/11/19
- Net positive capital flows into high-yield ETFs & mutual funds
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