JOBLESS CLAIMS PLUMMET TO 5-MONTH LOWS suggesting the labor market remains strong despite the deteriorating job growth. Claims fell by 15,000 reporting a seasonally adjusted total of 204,000 applications. The 10-year note rose 3.9 basis points. S&P +0.50%, DOW +0.39, NASDAQ +0.58%.

INFLATION EDGED HIGHER CLIMBING toward the Fed’s target rate of 2 percent reflecting a substantial drop in gasoline prices. Analysts expect the Federal Reserve to cut rates later this month. “The market has been hyper-sensitive to any issues on trade and if we get any whiff of a hint that there may be some progress, that’s viewed positively.” 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,  Noble Holding Intl. LTD (USD) 5.95% 4/1/2025 made analysts' 'Conviction Buy' list (See the chart above for ADI bonds above) Corey Mahoney

 

Key Gainers and Losers	Volume Leaders
+   Ecopetrol SA 4.125% 1/16/2025 + 0.1%   Verizon Communications Inc. 4.862% 8/21/2046 + 0.2% -   AT&T Inc. 4.5% 3/9/2048 -0.4%	GE Capital Intl. Funding Co.   4.418% 11/15/2035 Ecopetrol SA   4.125% 1/16/2025

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.07% -0.95% 0.18% 1.63% 9.42% 9.58% Mining -0.16% -1.33% 0.50% 3.93% 11.61% 10.86% Construction -0.12% -1.28% -0.04% 3.46% 8.85% 9.19% Manufacturing -0.12% -1.28% 0.54% 4.14% 10.15% 9.76% Transportion, Communication, Electric/Gas -0.21% -1.80% 0.36% 5.23% 12.96% 13.30% Wholesale -0.10% -1.04% 0.79% 3.64% 11.16% 10.16% Retail -0.12% -1.40% 0.68% 4.83% 11.42% 11.37% Finance, Insurance, Real-Estate -0.08% -1.01% 0.37% 2.99% 8.69% 9.27% Services -0.13% -1.39% 0.54% 4.00% 9.92% 10.41% Public Administration -0.06% -0.55% 0.39% 1.63% 4.53% 5.99% Energy -0.17% -1.39% 0.44% 4.02% 11.84% 12.20%   Total returns (non-annualized) by rating, market weighted.

New Issues	New Issues [Continued]
1. Texas Health Resources (USD) 3.372% 11/15/2051 (09/11/2019): 200MM Secured Notes, Price at Issuance 100, Yielding 3.37%. 2. Ontario Power Generation Inc. (CAD) 2.977% 9/13/2029 (09/11/2019): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.98%.

NEW ISSUANCE WATCH: on 09/12/19 participants welcome a $500M new corporate-bond offering by
Markel Corp. (USD) 4.15% 9/17/2050. 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)
Rite Aid Corp. (5Y Sen USD MR14) Weatherford International LTD (5Y Sen USD MR14)	Cable & Wireless Communication (5Y Sen USD CR14) SuperValu Inc. (5Y Sen USD MR14)

Loans and Credit Market Overview

SYNDICATED LOANS HIGHLIGHTS:

Deals recently freed for secondary trading, notable secondary activity:

• YRC Worldwide Inc., Busy Bees Group LTD, Beazer Homes USA Inc, Murphy Oil USA 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 18 bp (basis points), as of 09/12/19
• Net positive capital flows into high-yield ETFs & mutual funds

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