High Yield Daily Update

The Bloomberg Barclays US High Yield Index posted a return of 0.03% yesterday.* High yield bonds are better today on the heels of a calmer tariff climate following the meeting between the US and the EU.  Tech is getting slammed as Facebook did not meet expectations thus dragging down the NASDAQ.  Oil is higher on a big drawdown yesterday and it’s interesting that pirates are still disrupting our world: I read that Saudi Arabia temporarily halted oil shipments in the Bab el-Mandeb Strait after two tankers carrying 2 million barrels each came under attack by militants.

Durable Goods orders were below expectations but still point to strong corporate spending while Capital Goods orders beat expectations.  The more important Inventory number was flat, so nothing to gauge either way.  Our domestic economy seems to be in solid shape, but what about elsewhere?  If the world economy is doing so well why is the ECB still in the stimulus phase, still buying assets and hinting that the interest rate program won’t change until next summer?

No high yield bond new-issues came yesterday and that leaves four deals on the forward calendar for a total of ~$1.8B.  Earnings are kicking in, which means quiet periods are being implemented so the continued slow new-issuance pace will likely continue.

* 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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