U.S. SERVICES SECTOR GREW AT ITS SLOWEST PACE in 19-months as the
ISM non-manufacturing index declined to 56.1 in February from 59.7 in January. The
services sector is struggling with employment issues and sourcing skilled labor,
“they still have underlying concerns about employment resources and capacity constraints.” Orders for
heavy-duty trucks dipped 6.7 percent from February and
sank 66 percent in March compared to one year prior. The drop in orders is sending signals of
softening demand despite the extensive backlogs. According to
ADP, the private sector added 129,000 jobs in March, with the majority of the increase coming from the service sector despite weak growth.
ADI proprietary index data showed a net
yield increment for high-yield versus high-grade bonds. High-yield edged out high-grade. Among high-yield bonds showing topmost price gains at appreciable volumes traded,
Frontier Communications Corp. (USD) 7.125% 1/15/2023 made analysts' 'Conviction Buy' lists. (See the chart for
Frontier Communications Corp. below)
Corey Mahoney cmahoney@advantagedata.com).
NEW ISSUANCE WATCH: on 4/02/19 participants welcome a $400MM new corporate-bond offering by
Sable Intl. Finance. The most recent data showed money flowed out of high-yield ETFs/mutual funds for the week ended 3/29/19, with a net inflow of $0.589B, year-to-date $10.6B flowed into high-yield.
Loans and Credit Market Overview
SYNDICATED LOANS HIGHLIGHTS:
Deals recently freed for secondary trading, notable secondary activity:
- Crossamerica Partners LP, Ryman Healthcare Group, FLIR Systems Inc., Kirby Corp.
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 04/03/19
- Net positive capital flows into high-yield ETFs & mutual funds
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