CAM High Yield Weekly Insights
Fund Flows & Issuance: According to a Wells Fargo report, flows week to date were -$0.3 billion and year to date flows stand at -$47.8 billion. New issuance for the week was nil and year to date issuance is at $101.2 billion.
(Bloomberg) High Yield Market Highlights
- The recent rally in U.S. junk bonds has been steadily losing steam, edging lower for three consecutive sessions in the run up to a likely modest weekly loss, after warnings from bank chiefs of a slowing economy next year renewed recession fears. The losses extended across ratings as yields rose 17bps week-to-date to 8.55%.
- Market tone has softened since mid-October, according to Barclays strategist Bradley Rogoff.
- Focus will be on next week’s CPI data and Fed meeting for indications on future rate hikes and terminal rate expectations, wrote Rogoff on Friday.
- The rally, though more muted this week, also opened a window for banks to offload a portion of their large hung LBO debt.
- A group of banks found willing buyers for $750m of debt tied to the buyout of Citrix Systems.
- Thursday end with spread levels of 446 for the high yield market. Spreads by rating: 283 for BB, 464 for B, and 983 for CCC.
- Year-to-date the high yield index total return stands at -10.13%.
This information is intended solely to report on investment strategies identified by Cincinnati Asset Management. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. Fixed income securities may be sensitive to prevailing interest rates. When rates rise the value generally declines. Past performance is not a guarantee of future results.