High Yield Morning Update

Congress returns to session this week with sequester cuts as the top priority, and the focus of the market’s attention as we wind down the Q4 earning season. Fed chairman Bernanke will be speaking on Tuesday and Wednesday in front of the House and Senate on monetary policy, which could cause some market movement as everyone is digesting the possible implications of a less accommodative Fed after last week’s minutes were released. The J.P. Morgan high yield conference gets underway today in Florida, which is being blamed for the light volume to start the week. The underlying tone in high yield remains strong after the sell-off of two weeks ago, and despite money continuing to trickle out of the two index focused ETFs, though the pace has certainly slowed. The new issue market is also starting the week off on the slow side, with only one deal announced and expected to price this afternoon. Equities are modestly better this morning, the HY19 high yield credit index is unchanged and high yield cash bonds are flat to slightly better on thin volume.

The HY 19 Index (Markit CDX North America High Yield Index) is composed of 100 non-investment grade entities, with all entities domiciled in North America.  This index rolls every six months, in March and September.
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