EQUITIES STRUGGLED EARLY ON following weak factory data from china initiating once again fears of a global recession, producer prices shrank 0.8 percent in August. “A slowdown in China is clearly a sign that global deceleration of economic activity is real and is something we’re going to have to deal with.” The 10-year note rose 4.4 basis points. S&P +0.03%, DOW +0.26, NASDAQ +0.04%.

BOEING REPORTED DELIVERIES ARE DOWN 72 PERCENT in August from one year ago amid grounding its 737 MAX fleet.  The plane manufacturer only delivered 18 aircraft in August compared to 64 a year prior. Boeing anticipates the FAA will recertify the 737 MAXX planes by October allowing the aircraft to fly after six months of being grounded. The number of job openings slipped in July as the number of private-sector employees leaving their jobs rose to 2.6 percent matching 2008 highs. ADI proprietary index data showed a net yield increment for high-grade versus high-yield bonds. High-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded,  Frontier Communications Corp. (USD) 7.625% 4/15/2024 made analysts' 'Conviction Buy' list (See the chart below for ADI bonds above) Corey Mahoney

 

Key Gainers and Losers	Volume Leaders
+   AT&T Inc. 4.25% 3/1/2027 + 0.7%   Wells Fargo Bank NA 2.6% 1/15/2021 + 0.0% -   CVS Health Corp. 4.3% 3/25/2028 -0.5%	GE Capital Intl. Funding Co.   4.418% 11/15/2035 Honeywell Intl. Inc.   1.85% 11/1/2021

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.42% -0.50% 0.44% 1.88% 9.68% 9.23% Mining -0.32% -0.53% 1.08% 4.38% 11.94% 11.04% Construction -0.31% -0.52% 0.64% 4.23% 9.72% 9.51% Manufacturing -0.29% -0.56% 1.12% 4.68% 10.71% 10.11% Transportion, Communication, Electric/Gas -0.44% -0.87% 1.21% 5.86% 13.87% 14.09% Wholesale -0.20% -0.40% 1.26% 4.19% 11.83% 10.62% Retail -0.37% -0.65% 1.30% 5.38% 12.03% 11.93% Finance, Insurance, Real-Estate -0.21% -0.35% 0.82% 3.20% 8.96% 9.46% Services -0.33% -0.64% 1.18% 4.46% 10.64% 10.93% Public Administration -0.16% -0.18% 0.58% 1.48% 4.64% 5.90% Energy -0.35% -0.59% 1.04% 4.40% 12.25% 11.02%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
1. Fortune Brands Home Security Inc. (USD) 3.25% 9/15/2029 (09/09/2019): 700MM Senior Unsecured Notes, Price at Issuance 99.83, Yielding 3.27%. 2. Principal Fin Gobal (USD) 2.5% 9/16/2029 144A (09/09/2019): 400MM Secured Notes, Price at Issuance 99.325, Yielding 2.58%.

NEW ISSUANCE WATCH: on 09/10/19 participants welcome a $300M new corporate-bond offering by
Washington Gas Light Co. The most recent data showed a significant flow into fixed income ETFs for the month of August, with a net inflow of $14.0 billion.

 

Top Widening Credit Default Swaps (CDS)	Top Narrowing Credit Default Swaps (CDS)
Hertz Corp. (5Y Sen USD XR14) Hovnanian Enterprises Inc. (5Y Sen USD XR14)	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:

• Beazer Homes USA Inc, Murphy Oil USA Inc., Electronic Arts Inc., AutoData, PaySimple 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 19 bp (basis points), as of 09/10/19
• Net positive capital flows into high-yield ETFs & mutual funds

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