INVESTMENT GRADE BONDS ROSE AGAINST HIGH YIELDING DEBT in net prices linked to actual trades. The 10-year note lost 6.4 basis points settling at its lowest since October 2017. Equities settled lower and gave up gains following the threat of a trade war escalation with China. S&P -0.85%, DOW-0.93%, NASDAQ -0.39%.
CONSUMER CONFIDENCE HITS A SIX-MONTH HIGH IN MAY climbing to 134.1 revealing how resilient the labor market continues to be.
“Consumers expect the economy to continue growing at a solid pace in the short-term, and despite weak retail sales in April”. Home price growth further slowed in March falling to a
growth rate of 3.7 percent and existing home sales are down 4.4 percent from the previous month. David Blitzer, managing director at S&P Dow Jones Indices stated
, “Given the broader economic picture, housing should be doing better.” Barclays is betting on bundling home loans assembling a team of 144 bankers and traders re-entering the
risky market in order to amplify revenues. 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,
Abbvie Inc. (USD) 4.5% 5/14/2035 made analysts' 'Conviction Buy' lists. (See the chart for
Abbvie Inc. bonds below.)
Corey Mahoney cmahoney@advantagedata.com).
| Key Gainers and Losers |
Volume Leaders |
| + |
Bristol-Myers Squibb Co. 4.25% 10/26/2049 144A |
+ 0.3% |
| |
Anthem Inc. 3.65% 12/1/2027 |
+ 0.3% |
| - |
Commonwealth Bank of Australia 2.4% 11/2/2020 |
-0.1% |
|
General Motors Co. 5.95% 4/1/2049
Goldman Sachs Group Inc. VAR% 5/1/2029
|
| Industry Returns Tracker |
| Industry |
Past Day |
Past Week |
Past Month |
Past Quarter |
YTD |
Past Year |
| Agriculture, Forestry, Fishing |
-0.32% |
0.15% |
0.81% |
2.95% |
5.54% |
4.92% |
| Mining |
-0.14% |
0.01% |
0.23% |
2.95% |
6.40% |
6.42% |
| Construction |
-0.05% |
0.27% |
0.90% |
3.23% |
4.76% |
5.52% |
| Manufacturing |
-0.07% |
0.05% |
0.62% |
2.73% |
4.81% |
5.69% |
| Transportion, Communication, Electric/Gas |
-0.10% |
0.15% |
0.74% |
3.63% |
6.28% |
8.02% |
| Wholesale |
-0.11% |
0.00% |
0.65% |
3.10% |
5.50% |
6.16% |
| Retail |
-0.16% |
0.05% |
0.60% |
2.71% |
5.03% |
6.11% |
| Finance, Insurance, Real-Estate |
-0.10% |
0.10% |
0.67% |
2.54% |
4.65% |
6.21% |
| Services |
-0.08% |
0.09% |
0.68% |
2.68% |
4.92% |
6.63% |
| Public Administration |
-0.10% |
0.21% |
0.65% |
1.60% |
2.07% |
4.27% |
| Energy |
-0.14% |
0.03% |
0.28% |
3.06% |
6.61% |
8.16% |
| |
| Total returns (non-annualized) by rating, market weighted. |
|
| New Issues |
New Issues [Continued] |
|
1. Pennsylvania Electric Co. (USD) 3.6% 6/1/2029 144A (05/28/2019):300MM Senior Unsecured Notes, Price at Issuance 99.809, Yielding 3.62%.
2. Atlas Capital Uk 2019 PLC (USD) FLT% 6/7/2023 (05/28/2019):250MM Unsecured Notes, Price at Issuance 100.
|
|
Additional Commentary
NEW ISSUANCE WATCH: on 5/28/19 participants welcome a $300MM new corporate-bond offering by Air Lease Corp. . The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 5/24/19, with a net outflow of $4MM, year-to-date $11.0B 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) |
SuperValu Inc. (5Y Sen USD MR14)
Atmos Energy Corp. (5Y Sen USD MR14) |
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Service Corp. Intl., Lucid Energy Group LLC, Southern California Edison Co.
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 19 bp (basis points), as of 05/28/19
- Net positive capital flows into high-yield ETFs & mutual funds
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