Corporate Bond Market
The market rout in global equities continues this morning. After the 500 point plus drop in the US, the market was down 5.82% last week. This morning Europe’s STOXX is off 5.3%, the biggest one-day drop since 2011. US markets are down with the Dow down 561 and S&P down 66.75 this morning. More than $5 trillion has been erased from the value of global equities since China unexpectedly devalued the yuan on August 11, fueling concern that the slowdown in the world’s second-largest economy is worse than expected. US Treasuries are up as investors flock to safer assets, with the 30-year bond up 1-08 this morning trading at 2.660%. Oil is off, last trading at $38.94. Credit is opening down with the Investment Grade Index wider by 4.5 basis points.
Primary issuance in the corporate sector was light last week and given the market turmoil it is expected that many companies will stay on the sidelines. In corporate news this morning, Southern Co., the third largest US utility owner, agreed to buy natural-gas distributor AGFL Resources Inc. for $8 billion in cash.
Economic data: Case-Shiller housing, new home sales and consumer confidence are due out this morning.
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