The high-yield market continued to struggle last week amid plunging stocks, with the DOW falling in 9 of the past 10 sessions and dropping 1.5% last week, as well as weakening oil prices, moving lower in 6 of the past 10 sessions and off 1.66% for the week. High yield mutual and exchange traded funds now have unwound all of the inflows since the November elections as enthusiasm over the Trump administration continues to wane. The yield-to-worst/spread on the Bank of America High-Yield Index (BAML) widened 6bps/16bps over the past week to close at 6.01%/+407 bps. WTI close at $47.97 after hitting a three-month low of $47.34 mid-week, down 1.66% for the week. The US 10yr Treasury note closed at 2.41% versus 2.50% last week.
|Index||24-Mar Yield/Level||Weekly Return/Change||MTD Return/Change||YTD Return/Change|
|BAML Spread||407bps||16 bps||33 bps||-14 bps|
|10yr Treasury||2.41%||-9 bps||2 bps||-3 bps|
US high-yield retail funds recorded an inflow of $736 million for the week ended March 22, snapping a three week run of outflows that saw roughly $8 billion leave the asset class. The year-to-date outflow now stands at $5.69 billion. High-yield issuance slowed and was hesitant last week with just seven deals pricing for $4.185 billion in proceeds versus 15 deals and $7.55 billion in proceeds the previous week. Despite the slowdown over the past couple weeks, MTD new issue volume of $34.835 billion is good enough to make it the busiest month since April 2015. YTD 130 deals have priced for $73.895 billion in issuance, more than doubling last year’s total volume at this point.