CAM Investment Grade Weekly Insights
Credit spreads drifted wider this week while major equity indices posted their 7th consecutive week of losses. The OAS on the Bloomberg US Corporate Bond Index closed Friday, the 20th of May at 149 after having closed the week prior at 141. This marked the widest close for the index in 2022. The 10yr Treasury closed the week lower, at 2.78% after closing the week prior at 2.92%. The Investment Grade Corporate Index had a negative YTD total return of -12.99% through Friday while the YTD S&P500 Index return was -17.67% and the Nasdaq Composite Index return was -27.19%.
New issue volume showed a slight surprise to the upside during the week as $33.4bln of new debt exceeded the consensus estimate of $30bln. Projections for next week suggest $25-$30bln of new issuance.
Per data compiled by Wells Fargo, flows for investment grade were negative on the week. Outflows for the week of May 12–19 were -$1.2bln which brings the year-to-date total to -$67.2bln. This was smallest weekly redemption in 8 weeks according to Wells.