High yield bonds are trading flat in the secondary market but there is buying interest in the high yield bond ETF’s. The Bloomberg Barclays US High Yield Corporate Index was up 0.05% on Friday.1 No new-issues priced on Friday and there is a light forward calendar with only five deals. Five high yield bond deals priced last week for $4B in proceeds.
Oil is up a bit as uncertainty about Iran weighs on the market. You have Macron reassuring Iran they are sticking to the deal, while Pompeo tours the Middle East looking for support for tougher sanctions on Iran. The Baker Hughes oil rig count was up 5 to 825 rigs in Friday’s report, the highest level since March 2015. EIA domestic crude oil production was up 46,000 to an all-time record 10.586 million in last week’s report.2
Economic numbers continue to come in mixed, causing the 10-year Treasury to fall to 2.94% from the 3% level. Today’s release saw Personal Income and Real Personal Spending (not fake) below estimates, while Personal Home Sales did not meet estimates either. I repeat our thesis that demographics are playing a big roll here and will continue to do so.