U.S. STOCKS DROPPED MONDAY morning amid trade tensions with China. By mid-afternoon, most of the losses had been recovered, despite being down close to 500 points earlier in the day. Industrial and tech companies with exposure to China fared the worst, as shown by a 0.5% decline in the NASDAQ. 10-Year U.S. Treasury Notes fell 2.5 basis points. S&P -0.45%, Dow -0.25%, NASDAQ -0.50%.

THE LOSSES THIS MORNING WERE DESCRIBED as a "knee-jerk reaction in the market” by Michael Gayed, portfolio manager at New York investment advisory Pension Partners LLC. The large decline this morning shows that "investors are still sensitive about the possibility of deteriorating commercial relationships between the world's two largest economies". Meanwhile, crude oil and gold traded 1.19% and .02% higher respectively.   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, Xerox Corp. (USD) 4.8% 3/1/2035 made analysts' 'Conviction Buy' lists. (See the chart for  Xerox Corp. (USD) 4.8% 3/1/2035 below) Andrew Robartes (arobartes@advantagedata.com).

 

Key Gainers and Losers	Volume Leaders
+   Occidental Petroleum Corp. 4.2% 3/15/2048 + 0.1%   Dowdupont Inc. 4.493% 11/15/2025 + 0.2% -   CVS Health Corp. 5.05% 3/25/2048 -0.2%   Credit Suisse (USD) 2.75% 3/26/2020 -0.2%	Occidental Petroleum Corp.   4.2% 3/15/2048 Dowdupont Inc.   4.493% 11/15/2025

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.11% -0.63% -0.21% 2.73% 4.21% 4.68% Mining 0.02% -0.36% 0.57% 3.04% 5.90% 6.16% Construction 0.15% -0.09% 1.00% 3.40% 5.02% 5.34% Manufacturing 0.07% -0.18% 0.64% 2.53% 4.43% 5.24% Transportion, Communication, Electric/Gas 0.09% -0.13% 0.88% 3.57% 5.47% 7.23% Wholesale 0.04% -0.08% 0.90% 3.09% 5.35% 5.65% Retail 0.06% -0.15% 0.55% 2.59% 4.50% 5.70% Finance, Insurance, Real-Estate 0.06% -0.09% 0.53% 2.29% 3.90% 5.64% Services 0.06% -0.21% 0.43% 2.29% 4.18% 6.07% Public Administration 0.15% -0.00% 0.44% 1.40% 1.51% 3.70% Energy 0.05% -0.34% 0.55% 3.21% 6.09% 8.06%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
1. American Water Capital Corp. (USD) 3.45% 6/1/2029 (05/06/2019):550MM Senior Unsecured Notes, Price at Issuance 99.779, Yielding 3.48%. 2. Public Service Electric & Gas Co. (USD) 3.85% 5/1/2049 (05/06/2019): 375MM Secured Notes, Price at Issuance 99.983, Yielding 3.85%.

NEW ISSUANCE WATCH: on 5/06/19 participants welcome a $375MM new corporate-bond offering by Public Service Electric & Gas Co. The most recent data showed money flowed into high-yield ETFs/mutual funds for the week ended 5/03/19, with a net inflow of $21.3MM, year-to-date $13.9B 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:

• Twin River Management Group Inc., Lonsdale Finance Pty LTD, iHeartCommunications 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 14 bp (basis points), as of 05/06/19
• Net positive capital flows into high-yield ETFs & mutual funds

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