High Yield Daily Update

High yield bonds are better again today following Friday’s positive day, with the Bloomberg Barclays US Corporate High Yield Index up 0.09% on Friday.  European markets are steadier and Italy is getting their house in order, which is calming the US markets.  Oil is slightly higher and the US rig count was up two to 861 rigs, the ninth straight week of increase and the highest count since March of 2015.  Coal names are higher as the President urged power plants to use more clean coal.

Outflows from high yield bond mutual and exchange traded funds continued on Friday, with loan funds seeing a small inflow. Through the first five months, high yield bond mutual and exchange traded funds have seen a -$19.9B outflow, while floating rate bank loan mutual and exchange traded funds have seen a +$9.7B inflow.  One high yield bond new-issue priced on Friday and only two are on this week’s calendar thus far.  May’s high yield bond new-issuance came in at the slowest May since 2010.

Keep an eye on the upcoming G7 meeting and the talk from all sides leading into this.  We expect that there will be increased volatility as all nations continue to voice their positions in the media, but we all know that changes when you sit face to face with someone.

* Bloomberg Barclays U.S. Corporate High Yield Index covers the universe of fixed rate, non-investment grade debt (source Barclays Capital).
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