INVESTMENT-GRADE BONDS EDGED OUT HIGH-YIELD DEBT as bond investors scaled back risk upon the market
digesting the Feds dovish
tone
following yesterday’s conference. Data points to an
expanding economy
for the first time in five months aided by
“a rebound in stock prices”
and
“accommodative financial conditions”.
A Moody’s Analyst indicated expectations need to be reasonable for 2019,
“The U.S. economy enjoyed a banner year in 2018, juiced up by massive deficit-financed tax cuts for individuals and businesses and increases in government spending,”.
The
10-year U.S. Treasury note sank 8 basis point.
S&P
+1.09%,
Dow
+0.87%,
NASDAQ
+1.42%
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THE FEDERAL RESERVE ABANDONS PLANS TO RAISE RATES IN 2019 dramatically shifting to a very
dovish stance on economic policy. Jerome Powell reaffirmed his
“patient”
stance citing muted inflation, in addition, the Fed will terminate its
balance sheet reductions
in September. Powell stated, “I think we’re in a
good place right now.
We’re being patient, we’re watching, we don’t see any
data pushing us to move rates in any direction. We’re going to watch carefully
and patiently to allow events to evolve.
And when they do clarify, we will act appropriately.” The
10-year U.S. Treasury note sank 8 basis point.
S&P
-0.29%,
Dow
-0.55%,
NASDAQ
+0.07%
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JUNK BONDS PREVAILED AGAINST INVESTMENT-GRADE DEBT in net price gains linked to actual trades as a slight risk-on sentiment returns to the bond market. Investors are
progressively becoming bullish
on Treasuries as
fewer investors are inclined to short Government bonds
amid a surprise jump of weak economic data. Equities
snapped a six-day win streak
the,
S&P
slipped -0.01%, the
Dow
settled -0.09% lower, and the
NASDAQ rose +0.12%. Gold ticked higher closing above $1,300 an ounce. The
10-year U.S. Treasury note rose 0.8 basis point.
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INVESTMENT-GRADE DEBT EDGED OUT HIGH-YIELD DEBT in net prices linked to actual trades as investors carry over concerns about a
slowing economy from
last week. The market will keep a
keen eye on the Fed meeting this week expecting no rate moves and a continued
“patient”
monetary policy stance. Treasury yields
ticked higher
in anticipation of changes with the
FOMC’s dot plot disclosing
individual members' opinions on rates. The
10-year U.S. Treasury note rose 1.4 basis point.
S&P
+0.24%,
Dow+0.12%,
NASDAQ
+0.22%
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INVESTMENT-GRADE DEBT REGAINED FAVOR as investors
scaled back risk
upon additional weak economic data released on Friday.
Manufacturing output slipped
for the second straight month extending fears of a
slowing economy following the release of poor data earlier this week.
Output dipped 0.4 percent in February
and decreased 0.5 percent in January. The
10-year U.S. Treasury note declined 0.3 basis point. The
S&P
rose +0.50%, the gained
Dow
+0.54%, while the settled
NASDAQ
+0.59% higher.
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market update
LONG-DATED US TREASURY YIELDS GAINED UPON GEOPOLITICAL TENSIONS around the globe. Trade talks between the
U.S. and China are in a gridlock
and Brexit uncertainties grow after
parliament rejects a no-deal. The White House announced there is
“no rush” to finalize a trade deal, unwilling to compromise over intellectual property rights. The
10-year U.S. Treasury note gained 0.7 basis points and the
30-year note
rose 2.2 basis points.
S&P
+0.08%
Dow
+0.07%
NASDAQ
+0.08%
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JUNK BONDS GAINED AGAINST ITS INVESTMENT-GRADE counterparts in net prices linked to actual trades as
appetites for risk improve. Durable goods orders increased in January
lifted by a surge in orders
for commercial aircraft and commercial transportation vehicles. The
10-year U.S. Treasury note gained 0.8 basis points and the
30-year note
rose 0.2 basis points.
S&P
+0.78%,
Dow
+0.56%,
NASDAQ+0.78%
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HUMBLE INFLATION DATA released on Tuesday
affirms the Feds “patient” stance
on interest rate hikes. The
Consumer Price Index edged up 0.1 percent
excluding food and energy, marking the
smallest increase
since late August of 2018.
“We view the risks to the inflation outlook as weighted to the downside as the domestic economy has slowed more quickly than we had expected,”
Senior Economist at Moody’s. The
10-year U.S. Treasury note dipped 4 basis points and the
30-year note
sank 3.7 basis points.
S&P
+0.33%,
Dow
-0.34%,
NASDAQ
+0.47%
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market analytics,
research,
market update
EQUITIES CLIMBED HIGHER as a possible U.S. and China trade agreement could soon be accomplished. Beijing’s top central banker stated, “China had agreed not to
devalue its currency to support its exporters.”
Shares of Boeing contracted
after a
737
operated by an Ethiopian airline crashed when taking off from the
capital of Addis Ababa on Sunday. U.S. consumers
ramped up their
spending in February on durable and non-durable goods, a sign of
economic growth in Q1 of 2019. The
10-year U.S. Treasury note increased 0.5 basis points and the
30-year note rose 1.4 basis points.
S&P +1.25%,
Dow +0.70
%,
NASDAQ +1.84%.
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research,
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EQUITIES MARK THEIR FIFTH CONSECUTIVE DAY OF DECLINES as investors react to a weak jobs report
igniting concerns of a cooling economy. Jonathan Hill, from BMO Capital remained positive, the
“Treasury yield moves speak to willingness to look through this”. Despite the poor report, treasury yields remained stable, the
10-year U.S. Treasury note dipped 1.2 basis points and the
30-year note
sank 1.4 basis points.
S&P
-0.81%,
Dow
-0.78%,
NASDAQ
-1.13%
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Topics:
High Yield,
Analytics,
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research,
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