The Bloomberg Barclays US High Yield Index was up 0.08% yesterday, but down -0.55% for the month of May.* Today, the larger, on-the-run high yield bonds are a touch weaker, while there is a decent bid to alpha names as outflows continued yesterday from index-tracking ETF’s. Lipper reported a net outflow from high yield bond mutual an exchange traded funds for the week ending May 30th of -$18M, with active mutual funds seeing the brunt at an outflow of -$774M. Floating rate bank loan mutual and exchange traded funds saw another net inflow of $275M, but -$169m left ETF’s.
The non-farm payroll numbers came in above estimates but the participation rate was lower. Wages held steady and should alarm the Fed about wage inflation. The private sector was the big catalyst behind these numbers and that is what we want to see. Only one high yield bond new-issue printed yesterday and no issuance is expected today.