CAM Investment Grade Weekly Insights

Spreads for corporate credit were generally tighter on the week.  After closing the week prior at a spread of 102, the Bloomberg Barclays Corporate Index closed Thursday evening at a spread of 96.  The tone at mid-day Friday is mixed as risk markets continue to weigh the impact of coronavirus.  Treasuries were volatile over the course of the past week.  The 10yr closed at 1.51% last Friday which was its lowest level of the year.  The benchmark rate then closed as high as 1.65% this Wednesday and is now fluttering around 1.58% on Friday afternoon.

The primary market had a fair week as corporate borrowers issued over $21bln in new debt.   2020 issuance has eclipsed $154bln according to data compiled by Bloomberg.

According to Wells Fargo, IG fund flows during the week of January 30-February 5 were +$9.0bln making it the largest 5-week total for fund flows on record.  This brings year-to-date IG fund flows to over $36bln.  Both domestic and global investors continue to favor U.S. credit markets as one of the last bastions for reasonably safe yield.