Advantage Data High Yield Bond Market Summary

RISK-OFF SENTIMENT PREVAILED AS INVESTMENT-GRADE DEBT significantly outpaced junk bonds in net prices linked to actual trades.  Equities receded after the release of weak economic data, despite the 11.8 percent increase jump in existing home sales in February.  A cooling trend has emerged, “Homes aren’t flying off the market as they have been” Cheryl Young senior economist at Trulia.  The 10-year U.S. Treasury note plummeted 9.6 basis point.  S&P -1.90%, Dow -1.77%, NASDAQ -2.50%

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%

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%

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.

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%

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%