High-yield was weaker yesterday morning, then rallied into the afternoon only to fade into the close and finish lower on the day as global equity markets continued their meltdown. Trading volume remains on the light side and it still feels like there are selective buyers in the market looking to accumulate paper on balance. The yield and spread on the Bank of America High-Yield Index widened 1bp and 8bps yesterday to close at 8.83% and +711bps,  respectively. With the continued risk off tone to the market, treasuries rallied on the day pushing the yield on the US 10-year note 7bps tighter to 2.17%. The high-yield primary market remained on hold yesterday with the volatile market backdrop. Despite the volatility in the market high-yield mutual and exchange traded funds managed to attract $220 million Wednesday as money continues to flow back into the asset class after massive withdrawals throughout December. This morning we’re opening risk off again with high-yield paper down 1-3 points generically as the equity route  continues after China devalued the yuan again overnight, and oil prices fall to a 12-year low, heightening fear over the state of the global economy.

The Bank of America Merrill Lynch High Yield Index monitors the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market.  Index data sourced from Bloomberg. Yield referenced is the yield-to-worst and spread referenced is the spread-to-worst.

Daily fund flow data sourced from J.P. Morgan.