High yield bonds are a bit weaker today as Treasury yields are moving higher on the back of stronger Durable and Capital Goods orders. Only one new issue came to market yesterday, but over a half dozen for over $6B in proceeds are on the forward calendar. This has been the busiest September since 2014.
Oil is back above $52 on reports that crude stockpiles have shrunk, putting a base under energy credits. Natural gas prices have been weaker over the last week, and we have seen a large decline in natural gas prices in Western Canada with certain regions showing the worst monthly pricing in 15 years.
As per the health of the high yield asset class and if you trust and believe in the ratings agencies (though we don’t give them much credence), another indicator such as upgrade-downgrade ratio showed strength with upgrades exceeding downgrades MTD.
All eyes now are on the Trump tax plan.