TREASURY YIELDS SANK as investors scaled back risk fleeing to safe-haven assets on Wednesday. ADP released weak private-sector employment numbers for February, companies added 183,000 jobs compared to estimates of 189,000 jobs slowing to a three-month low. Investors will keep a keen eye on the Labor Department’s official report to be released on Friday. The 10-year U.S. Treasury note dipped 3.4 basis points. S&P -0.66%, Dow -0.51%, NASDAQ -0.92%
U.S. TRADE DEFICIT SURGES TO 10-YEAR HIGHS despite numerous efforts from the White House to
reduce the shortfall. The deficit
spiked 19 percent in December alone tallying a
walloping $621 billion in 2018. Majority of the
deficit stems from unbalanced trade with China rising 12 percent year-over-year totaling $419 billion. New York Fed President John Williams
cooled fears of slowing growth insisting there is
“isn’t necessarily a cause for alarm” but a “new normal”. 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,
Anheuser-Busch Inbev Worldwide Inc. (USD) 8.2% 1/15/2039 made analysts' 'Conviction Buy' lists. (See the chart for
Anheuser-Busch Inbev Worldwide Inc. below) .
Corey Mahoney (
cmahoney@advantagedata.com).
NEW ISSUANCE WATCH: on 3/5/19 participants welcome a $1250MM new corporate-bond offering by
Pfizer Inc. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 2/22/19, with a net inflow of $0.69B, year-to-date $9.7B flowed into high-yield.
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Xylem Inc., 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 17 bp (basis points), as of 03/06/19
- Net positive capital flows into high-yield ETFs & mutual funds
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