THE TEN-YEAR TREASURY YIELD FALLS BELOW 2.4 PERCENT sending equities into free-fall before rising trimming losses prior to market close. Investors fear of a looming recession given the yield inversion however, “Based on history, we get another year and a half or so before recession”. In addition, markets pounder whether the Fed will cut interest rates this year in wake of wake economic data. The 10-year U.S. Treasury note sank 3.9 basis points. S&P -0.46%, Dow -0.13%, NASDAQ -0.63%
| Key Gainers and Losers | Volume Leaders | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
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Dell Intl LLC 5.3% 10/1/2029 144A Polar Tankers Inc. 5.951% 5/10/2037 144a |
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| New Issues | New Issues [Continued] |
|---|---|
|
1. Mars Inc. (USD) 3.875% 4/1/2039 144A (03/26/2019): 700MM Senior Unsecured Notes, Price at Issuance 99.875, Yielding 3.88%. 2. NatWest Markets PLC (USD) FLT% 9/29/2022 144A (03/26/2019):300MM Senior Unsecured Notes, Price at Issuance 100. |
Additional Commentary
Merna Reinsurance The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 3/22/19, with a net inflow of $1.8B, year-to-date $10B 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) |
Export Credit Bank of Turkey (5Y Sen USD CR14) Atmos Energy Corp. (5Y Sen USD MR14) |
Loans and Credit Market Overview
Deals recently freed for secondary trading, notable secondary activity:
- Syneos Health, Inc., Fred Olsen Wind LTD, Carbonite Inc, HotelBeds, Nine West Holdings Inc.
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 15 bp (basis points), as of 03/27/19
- Net positive capital flows into high-yield ETFs & mutual funds
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