HUMBLE INFLATION DATA released on Tuesday affirms the Feds “patient” stance on interest rate hikes. The Consumer Price Index edged up 0.1 percent excluding food and energy, marking the smallest increase since late August of 2018.  “We view the risks to the inflation outlook as weighted to the downside as the domestic economy has slowed more quickly than we had expected,” Senior Economist at Moody’s.  The 10-year U.S. Treasury note dipped 4 basis points and the 30-year note sank 3.7 basis points.  S&P +0.33%, Dow -0.34%, NASDAQ +0.47%  

CORE CPI ROSE A MARGINAL 0.2 PERCENT IN FEBRUARY aided by a significant 1.1 percent increase in apparel and gas prices advancing 1.5 percent.  Treasuries continue to rally sending yields lower as “market participants are shifting to a more dovish outlook on inflation”.  Boeing shares further tumbled, declining another 5.93% on Tuesday in wake of the deadly 737 MAX plane crash in Ethiopia.  The U.S. Transportation Department and FAA have not grounded the planes despite the planes being grounded in many Asian and all European countries. 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, AT&T Inc. (USD) 5.45% 3/1/2047 made analysts' 'Conviction Buy' lists. ((See the chart for ADI indexes above) Corey Mahoney cmahoney@advantagedata.com).

 

Key Gainers and Losers	Volume Leaders
+   Dell Intl LLC 4.9% 10/1/2026 + 0.2%   Volkswagen Group of America Finance LLC 4.75% 11/13/2028 144A + 0.1% -   ICICI Bank LTD 3.5% 3/18/2020 Reg S -0.6%	Takeda Pharmaceutical Co. LTD   5% 11/26/2028 144A Roche Hldg Inc.   1.75% 1/28/2022 144A

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.03% 0.48% 0.84% 3.31% 2.64% 4.42% Mining -0.04% 0.22% 0.51% 4.18% 3.45% 3.49% Construction 0.02% 0.63% 0.71% 3.19% 2.29% 4.29% Manufacturing -0.02% 0.31% 0.25% 3.06% 2.46% 3.31% Transportion, Communication, Electric/Gas -0.03% 0.50% 0.56% 3.91% 2.96% 4.11% Wholesale 0.02% 0.25% 0.64% 3.52% 3.31% 3.39% Retail -0.01% 0.37% 0.24% 3.01% 2.49% 3.33% Finance, Insurance, Real-Estate -0.02% 0.30% 0.57% 3.04% 2.16% 4.02% Services -0.04% 0.42% 0.22% 3.11% 2.30% 3.85% Public Administration -0.03% 0.26% 0.32% 1.65% 0.77% 3.34% Energy -0.04% 0.28% 0.61% 4.46% 3.71% 3.99%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
1. BB&T Corp. (USD) 3.05% 6/20/2022 (03/11/2019): 1350MM Senior Unsecured Notes, Price at Issuance 99.997, Yielding 3.05%. 2. Dominion Energy Inc (USD) 4.6% 3/15/2049 (03/11/2019): 400MM Senior Unsecured Notes, Price at Issuance 99.967, Yielding 4.6%.

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 MR14) Atmos Energy Corp. (5Y Sen USD MR14)

Loans and Credit Market Overview

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 18 bp (basis points), as of 03/12/19
• Net positive capital flows into high-yield ETFs & mutual funds

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