It was another strong week for US risk markets with high yield and spreads dropping to multi-year lows, while equity indices continue to notch new highs as the DJIA traded up in ten of the last 12 sessions to hit a new record high at Friday’s close. The yield-to-worst and spread on the Bank of America High-Yield Index (BAML) tightened 3bps and 24bps over the past week to close at 5.63% and +360 bps, respectively. CCC credits continued to outperform BBs and Single-B’s in this risk on environment generating YTD returns for the index of 5.57% for CCC rated credits versus 2.28% for BBs and 2.85% single-B’s. WTI closed at $53.33, down 1.2% on the week after hitting an 18-month high of $54.45 last week. The US 10yr Treasury note closed with a yield of 2.48% versus a YTD low of 2.31% at the prior Friday’s close.
|3-Mar Yield/Level||Weekly Return/
|BAML Spread||360 bps||-24 bps||-14 bps||-61 bps|
|10yr treasury||2.48%||17 bps||9 bps||3 bps|
US retail mutual and exchange traded funds reported outflows from the high-yield asset class totaling $240 million for the week ended March 1st, just the first weekly outflow in the past five weeks. Since the November elections, the high-yield asset class has taken in $8.7 billion in net inflows. Issuance resumed in the high-yield market after a two-week stretch of light volume with nine deals for $5.5 billion in proceeds. The final tally for February was 36 deals for $20 billion in proceeds, and the year to date tally now stands at 82 deals for $44.61 billion in proceeds.