Thursday, February 16, 2017

Corporate Bond Market

US Equity Futures are down to start the session with the DJ Futures -39 and the S&P Futures -4.75.  The global tone is negative with overseas equities mixed through the overnight. Oil is up, last at $53.35/ barrel and rates are stronger with the 10yr Treasury last at 2.474%. Credit is wider with the Invest Grade Index showing 56.474/57.059 and cash is also weaker.

In credit news, Wednesday’s primary market saw $5.65bn priced in Investment Grade Credit bringing the weekly tally to $24.25bn. From yesterday’s issuance, we are active in CMS, MUFG, and PM. On the earnings front: Alexion Pharma, Charter, Kate Spade, Lab Corp, and MGM reported Q4 2016 earnings that outperformed analysts’ estimates. Cabela’s and GNC missed earnings expectations for Q4 2016.


In economic data, January’s Housing Starts and Jobless Claims will be announced today.

Wednesday, February 15, 2017

Corporate Bond Market

US Equity Futures are flat to start the session with the DJ Futures +2 and the S&P Futures -5.  Overseas equities are mixed through the overnight with European and Asian Markets mixed. Oil is down, last at $53.04/ barrel and rates are weaker with the 10yr Treasury last at 2.511%. Credit is wider with the Invest Grade Index showing 56.384/56.937 and cash is also weaker.

In credit news, Tuesday’s primary market saw $11.9bn priced in Investment Grade Credit bringing the weekly tally to $18.6bn. There are new deals on the calendar from AECOM, Philip Morris, and MUFG. On the earnings front, Hilton and PepsiCo reported Q4 2016 earnings that outperformed analysts’ estimates. AIG and Molson Coors missed earnings expectations for Q4 2016.


In economic data, there is a list of announcements scheduled for today. First, MBA Mortgage Applications fell 3.7% last week. The cost of living in the US (Consumer Price Index) has increased by 0.6%, the most since Feb 2013. US Retail Sales grew 0.4% in January beating survey expectations of 0.1%. US Industrial Production fell 0.3% in January (underperforming survey expectations). Later today, US Foreign Net Transactions will be reported along with US Treasury International Capital Net Monthly Inflows Total.

Tuesday, February 14, 2017

Corporate Bond Market

US Equity Futures are relatively flat to start the day with the DJ Futures -4 and the S&P Futures -0.50.  Overseas equities are mixed through the overnight with European Markets mixed and Asian Markets trading up. Oil is up, last at $53.41/ barrel and rates are weaker with the 10yr Treasury last at 2.443%. Credit is wider with the Invest Grade Index showing 56.282/56.942 and cash is also weaker.

In credit news, Monday’s primary market saw $6.7bn priced in Investment Grade Credit. This week’s estimate consensus is $15-$20bn in new issuance. There are new deals on the calendar from JP Morgan, Morgan Stanley, Novartis and JBIC. On the earnings front, T-Mobile and Discovery Communications reported Q4 2016 earnings that outperformed analysts’ estimates. There are a handful of earnings calls set for today from: AIG, Molson Coors, Rent-A-Center, Devon Energy, Diamondback Energy, Express Scripts, and a few others. 

In economic data, there are a few announcements scheduled for today with the top headline being Fed Chair Yellen’s semi-annual Congressional testimony. First, NFIB Small Business Optimism Index beat survey estimates reporting 105.9 for January. Following, Jan’s Producer Price Index will be announced this morning (survey estimate 0.3%).

Monday, February 13, 2017

Corporate Bond Market

US Equity Futures are strong to start the week with the DJ Futures +54 and the S&P Futures +4. The global tone is green across the board with overseas equities trading higher through the overnight. Oil is down to $53.68/ barrel and rates are weaker with the 10yr Treasury last at 2.434%. Credit is firm with the Invest Grade Index showing 56.82/57.45 and cash is also stronger.

In credit news, last week’s primary market had the slowest week this year, pricing $24.6bn in Investment Grade Credit. This week’s consensus in new issue is $15-20bn.  On the other side, High Yield had its busiest week in the primary market, pricing $10bn last week. February’s Investment Grade new issue tally is $25.05bn; YTD tally $195.13bn. There is a new deal announced from BNZ and Goldman Sachs will be Tapping their 5NC4 3% 4/26/2022, 5NC4 FRN 4/26/2022, and 10NC9 3.85% 1/26/2027 issues.

Tuesday, February 7, 2017

Corporate Bond Market

US Equity Futures are up to start the session with the DJ Futures +60 and the S&P Futures +6. The global trend is positive with overseas equities trading higher through the overnight. Oil is down to $52.78/ barrel and rates are weaker with the 10yr Treasury last at 2.423%. Credit is firm with the Invest Grade Index showing 57.05/57.71 and cash is also stronger.

In credit news, yesterday’s primary market saw $6.2bn priced in Investment Grade Credit with financials leading the way. Monday’s High Yield issuance was active with $6.05bn brought to market. From yesterday’s issuance, we are active in: Amerigas, GATX, Estee Lauder, Discover, and First Republic Bank. There are a handful of deals for today from: KFW, Dexia, Silgan, EIB, BNG, and Citigroup.

On the earnings front: Aramark, Cardinal Health, General Motors, Mallinckrodt, Mosaic, and Transdigm reported performance that beat Wall St’s estimates for Q4 2016 this morning.

In economic data, US Trade Balance for December 2016 will be reported this morning followed by Job Openings and Consumer Credit.

 

Monday, February 6, 2017

Corporate Bond Market

US Equity Futures are fairly flat to start the week with the DJ Futures -3 and the S&P Futures -1. The global trend is negative with overseas equities trading lower through the overnight. Oil is up to $53.96/ barrel and rates are weaker with the 10yr Treasury last at 2.446%. Credit is wider with the Invest Grade Index showing 56.98/57.69 and cash is also tighter.

In credit news, last week’s primary market saw $45.8bn priced in Investment Grade Credit with tech giants Apple, Microsoft and AT&T leading the way. In the High Yield space, $5.745bn was priced last week. There are deals from: Amerigas, Post Holdings and Vale Overseas on the calendar for today’s business.

On the earnings front: Hasbro, Sysco and Tyson Foods beat analysts’ estimates for Q4 2016. Later today, 21st Century Fox will be releasing their earnings from the prior quarter.

 

Friday, February 3, 2017

Corporate Bond Market

US Equity Futures are strong to end the week with the DJ Futures +40 and the S&P Futures +3.00. The global trend is positive with overseas equities trading higher through the overnight. Oil is up to $53.71/ barrel and rates are weaker with the 10yr Treasury last at 2.48%. Credit is firm with the Invest Grade Index showing 58.27/58.87 and cash is also tighter.

In credit news, yesterday’s primary market saw $11.5bn priced in Investment Grade Credit with Apple leading the charge. In the High Yield space, Harland Clarke brought a $350mn 5.5NC2 deal. We are active in both Apple and Harland Clarke from yesterday’s issuance.

On the earnings front, Weatherford (WFT; Caa1/B) reported a 4Q16 adjusted loss of $303mn, or $0.32/share, coming in just ahead of consensus expectations for a $0.34/share loss. Adjusted Ebitda totaled $67 mn in 4Q16, little changed from the prior quarter but down 71% from the year­ ago quarter. Adjusted results exclude $246mn, or $0.27/share, of net after ­tax charges including costs for severance and restructuring of business lines, litigation charges, impairments, and asset write ­downs. Please take a moment to view Sean’s piece that he sent around last night on the detailed earnings and our upgraded recommendation on the credit.


In economic data, US Underemployment Rate rose to 9.4%, highest since October and US Annual Hourly Earnings gain weakest since August.

Wednesday, February 1, 2017

Corporate Bond Market

US Equity Futures are up to start the day with the DJ Futures +49 and the S&P Futures +5.25. Overseas equities are strong through the overnight. Oil is up to $53.16/ barrel and rates are weaker with the 10yr Treasury last at 2.472%. Credit is firm with the Invest Grade Index showing 58.87/59.53 and cash is also tighter.

In credit news, yesterday’s primary market saw $10bn priced in Investment Grade Credit from AT&T. In the High Yield space, Mercer International priced a $225m deal. January’s issuance tallied $227.45bn in Investment Grade and just over $19bn in High Yield. There are a few deals on the calendar for today’s business from Ontario, Ferroglobe, and Entre Rios. In addition, Scientific Games Corp is expecting to add $1b to 7% Sr Sec Notes 2022.

In economic data, there are a handful of key announcements scheduled for today. First, MBA Mortgage Applications fell 3.2% last week and US Employment Report crushed expectations by adding a total of 246,000 jobs in January (estimate was 168,000 jobs). Following, the Markit US Manufacturing PMI and ISM Manufacturing PMI will be reported later this morning. At 2PM, the FOMC Fed Funds Target Rate Decision will be announced.

Tuesday, January 31, 2017

Corporate Bond Market

US Equity Futures are down to start the day with the DJ Futures -38 and the S&P Futures -5. Overseas equities are mixed through the overnight. Oil is weaker last at $52.56/ barrel and rates are stronger with the 10yr Treasury last at 2.468%. Credit is wider with the Invest Grade Index showing 58.9/59.5 and cash is also weaker.

In credit news, yesterday’s primary market saw $17.85bn priced in Investment Grade Credit. Microsoft led the charge with their $17bn, 7-part deal. Dealer consensus calls for $15-$25bn to price this week. In the High Yield space, there are a couple of deals in the pipeline from Mercer International and Vertiv Intermediate. January’s High Yield new issue tally is $18.785b. There is one deal announced from Polyus Gold to potentially price today.

In economic data, the US Employment Cost Index for Q4, 2016 will be reported this morning.

Tuesday, January 27, 2017

Corporate Bond Market

US Equity Futures are flat to start the day with the DJ Futures +2 and the S&P Futures -0.5. Overseas equities are mixed through the overnight. Oil is weaker last at $53.4/ barrel and rates are also down with the 10yr Treasury last at 2.518%. Credit is wider with the Invest Grade Index showing 56.86/57.56 and cash is also weaker.

In credit news, yesterday’s primary market saw one deal priced from Capital One for $2bn priced in Investment Grade Credit. There are a few High Yield deals on the calendar for today from Wildhorse, Jacobs, and Trinidad Drilling.  

In economic data, there are a couple of key reports on the calendar for today. First, the Quarterly Change in Annualized GDP will be announced for Q4, 2016 followed by US Durable Goods Orders.

Monday, January 26, 2017

Corporate Bond Market

US Equity Futures are up to start the day with the DJ Futures +27 and the S&P Futures +1. Overseas equities are mixed through the overnight. Oil is stronger, last at $52.93/ barrel and rates are weaker with the 10yr Treasury last at 2.54%. Credit is wider with the Invest Grade Index showing 57.05/57.7 and cash is also weaker.

In credit news, yesterday’s primary market saw $10.95bn priced in Investment Grade Credit and $1.135bn priced in High Yield. From yesterday’s issuance, we are active in JPM and Smithfield. There are a few deals announced from Rusal Capital and The Province of Ontario on the calendar for today’s business.

In economic data, today has a handful of reports on the agenda. First, the Monthly Change in Wholesale Inventories for December will be announced followed by this week’s tally of Initial Jobless Claims/Continuing Claims. Later this morning, the Monthly Change in New Home Sales for December along with December’s Monthly Change in the US Conference Board’s Leading Index.

Tuesday, January 24, 2017

Corporate Bond Market

US Equity Futures are fairly flat to start the day with the DJ Futures +5 and the S&P Futures -0.50. The global tone is positive with overseas equities trading up through the overnight. Oil is stronger, last at $52.83/ barrel and rates are weaker with the 10yr Treasury last at 2.428%. Credit is firm with the Invest Grade Index showing 59.17/59.86 and cash is also tighter.

In credit news, yesterday’s primary market saw $$9.05bn priced in Investment Grade Credit and $350mn priced in High Yield. From yesterday’s issuance, we are active in: Goldman Sachs and UAL. There are deals announced from Nordic Investment Bank, Quebec, Morgan Stanley, EBRD, Hexion, Kernel, and Vendanta on the calendar for today’s business. Estimates call for $15-$25bn to price this week. On the earnings front; DR Horton, Fifth Third Bancorp, Union Bancshares, J&J, Kimberly Clark, Lockheed Martin, 3M and Travelers Co beat analysts’ estimates for Q4, 2016. On the other side; Verizon, Polaris, and Janus Capital missed Wall Street’s expectations.

In economic data, today has a couple of reports on the agenda. First, the Markit US Manufacturing PMI for January well be announced followed by December’s monthly change in Existing Home Sales.

Tuesday, January 17, 2017

Corporate Bond Market

US Equity Futures are down to start the week with the DJ Futures -54 and the S&P Futures -9. The global tone is mixed with European equities trading lower and Asian markets stronger through the overnight. Oil is stronger at $53/ barrel and rates are also up with the 10yr Treasury last at 2.347%. Credit is wider with the Invest Grade Index showing 59.2/59.9 and cash is also weaker.

In credit news, last week’s primary market saw $51.8bn priced in Investment Grade Credit and more than $5bn priced in High Yield. There are deals announced from BofAML and Kommunivest on the calendar for today’s business so far.

In economic data, January’s Empire Manufacturing Index will be reported this morning (estimates call for 8.5).  US Equity Futures and European Equities sold off following Britain’s Prime Minister Theresa May’s pledge to pull the nation out of the European Union’s single market while staying inside parts of its customs union. The UK parliament will vote on the final Brexit deal before it comes into power.

Tuesday, January 10, 2017

Corporate Bond Market
US Equity Futures are mixed to start the day with the DJ Futures -5 and the S&P Futures unchanged. The global tone is mixed with overseas equity markets trading mixed through the overnight. Oil is a bit stronger at $52.07/ barrel and rates are weaker with the 10yr Treasury last at 2.387%. Credit is wider with the Invest Grade Index showing 58.4/59.1 and cash is also weaker.

In credit news, Monday’s primary market saw $10.7bn priced in Investment Grade Credit. We are active in: Dominion, General Mills, Jefferies, and Petrobras from yesterday’s new issue. There are deals announced from: IADB, KfW, Kommunivest, Nissan, and KfW for today’s business.

In economic data, there are a couple of key announcements scheduled for today. First, NFIB Small Business Optimism Index reported 105.8, exceeding the survey expectation of 99.5. Following, November’s Monthly % Change in Merchant Wholesalers Inventories will be declared later this morning. 

Monday, January 9, 2017

Corporate Bond Market
US Equity Futures are down to start the session with the DJ Futures -22 and the S&P Futures -2. European equities are trading lower and Asia is mixed through the overnight. Oil is up to $54.08/ barrel and rates are weaker with the 10yr Treasury last at 2.35%. Credit is wider with the Invest Grade Index showing 56.9/57.7 and cash is also weaker.

In credit news, Thursday’s primary market saw $16.6bn priced in Investment Grade Credit and $600mn priced in High Yield. The weekly total topped $60bn in Investment Grade and $800mn in High Yield. From yesterday’s new issue, we are active in Comcast and SocGen.

In economic data, there are a handful of few announcements scheduled for today. First, the US Trade Balance will be released followed by the change in monthly Nonfarm Payrolls and Manufacturing Payrolls. Also, December’s US Unemployment Rate will be reported along with November’s Factory, Durable, and Capital Goods Orders.

 

 

Tuesday, January 3, 2017

Corporate Bond Market

US Equity Futures are strong to start the year with the DJ Futures +150 and the S&P Futures +18. Overseas equities are trading higher through the overnight. Oil is up to $54.92/ barrel and rates are weaker with the 10yr Treasury last at 2.5%. Credit is firm with the Invest Grade Index showing 58.82/59.62 and cash is also tighter.

In credit news, December’s primary market drifted with a tally of $46.075bn vs the $48bn estimate. 2016 accounted for $1.61tn in new issue Investment Grade Credit. High Yield had its busiest December since 2013 with $19.19bn priced. The 2016 tally for High Yield Credit is $229.976bn. There are deals announced from: Barclays, BNP Paribas, Credit Agricole, Duke Energy, Rabobank, Santander UK, and Westpac Banking to kick off the new year.

In economic data, there are a few announcements scheduled for today. First, Markit US Manufacturing PMI will be released followed by the ISM Manufacturing PMI and ISM Manufacturing Report on Business Prices Index. Also, November’s Construction Spending will be announced.

Municipal Bond Market

Munis rallied to close out the year as investors looked to put money to work ahead of January reinvestment mixed with an aggressive tax swap season.  We saw buying across the curve; however, the long end certainly seemed to outperform the rest of the market with aggressive buying of 4 & 5 coupons.  Demand should continue into this week with a light new issuance calendar of only $3bln and money still on the sidelines that needs to be put to work.  This week’s calendar is mostly comprised of higher education names with deals coming from the University of Texas, University of Pittsburgh and University of Connecticut.  We believe that we should see strong demand in the primary as customers look to put some money to work.  30 day supply is $9.6bln this morning.

PR paper ended the year unchanged from levels that we saw in early December.  Demand was significantly lighter to end the year after outperforming the market for most of 2016.  We saw nontraditional PR buyers step into the market throughout the year which accelerated the rally in insured paper.  PR 8’ of 2035 continue to trade around $67.50 (11.86%) and should remain at this level until we receive more clarity out of the commonwealth.

30 Day visible supply: $9.6bln

Thursday, December 15, 2016

Corporate Bond Market

US Equity Futures are mixed to start the session with the DJ Futures +12 and the S&P Futures -1. Overseas equities are mixed through the overnight with the exception. Oil is up to $51.09/ barrel and rates are weaker with the 10yr Treasury last at 2.615%. Credit is wider with the Invest Grade Index showing 62.45/62.872 and cash is also weaker.

In credit news, Wednesday’s primary market was quiet as the Fed meeting loomed. There was $1bn priced in High Yield credit yesterday and nothing in Investment Grade. December’s Investment Grade tally is $43.725bn with $48bn expected. There are new deals from: Gulfport Energy, Cincinnati Bell, Open Text, and Tesoro on the calendar for today.

In economic data, the Fed raised short term rates by .25% yesterday and hinted at 3 more possible rate hikes in 2017. Moving to today, there are a few key announcements scheduled. First, The US Q3 Current Account Balance will be reported followed by Novembers CPI and Jobless Claims.  

 

Thursday, December 8, 2016

Corporate Bond Market

US Equity Futures are up to start the day with the DJ Futures +20 and the S&P Futures +2.25. The global tone is positive with overseas equities trading higher through the overnight with the exception of Hong Kong. Oil is up to $50.20/ barrel and rates are weaker with the 10yr Treasury last at 2.365%. Credit is wider with the Invest Grade Index showing 60.8/61.7 and cash is also weaker.

In credit news, Wednesday’s primary market saw $2.45bn priced in Investment Grade Credit, led by the Bank of Montreal. The weekly total is just shy of $16.5bn. From yesterday’s issuance, we are active in EPR Properties and Flushing Bank. There is a new deal from GTT Communications on the calendar for this afternoon.

In economic data, Jobless Claims will be reported this morning followed by the change in US Households Net Worth.

 

Wednesday, December 7th, 2016

Corporate Bond Market

US Equity Futures are fairly flat to start the session with the DJ Futures +5 and the S&P Futures -0.5. The global tone is positive with overseas equities trading higher through the overnight. Oil is down to $50.44/ barrel and rates are rallying with the 10yr Treasury last at 2.367%. Credit is firm with the Invest Grade Index showing 61.97/62.75 and cash is also tighter.

In credit news, Tuesday’s primary market saw $7.65bn priced in Investment Grade Credit. From yesterday’s issuance, we are active in: Pemex, CBL, and PNC. There are new deals from: Antero, BNP, and Tervita on the calendar for today’s business.

In economic data, there are a few key announcements on the calendar for today. First, Mortgage Applications fell 0.7% last week. Later today, Job Openings and Consumer Credit tally for October will be reported.

 

 

Tuesday, December 6th, 2016

Corporate Bond Market

US Equity Futures are fairly flat to start the session with the DJ Futures +7 and the S&P Futures +2. The global tone is mixed with overseas equities trading mostly higher in Europe and mixed in Asia. Oil is down to $51.10/ barrel and rates are weaker with the 10yr Treasury last at 2.396%. Credit is firm with the Invest Grade Index showing 63.3/64.2 and cash is also tighter.

In credit news, Monday’s primary market saw $6.325bn priced in Investment Grade Credit and $3.25bn priced in High Yield. From yesterday’s issuance, we are active in: Ford, Delmarva, DPS, NNN, and KeyBanc. There are new deals from: Chesapeake, Pemex, Mattamy, and Parsley on the calendar for today’s business.

In economic data, there are a few announcements scheduled for today. First, October’s Trade Balance will be announced followedby Factory Orders US Durable Goods.