CAM High Yield Weekly Insights

(Bloomberg)  High Yield Market Highlights

• The selloff in junk bonds extended for a third straight session, driving yields to a new 17-month high and risk premiums to the widest in eight weeks as rising oil prices intensified inflation fears.
• The losses swept across ratings as Treasury yields pushed higher, pushing broad junk bond yields past 8%. CCC yields surged to 14.5%, the highest since November 2023.
• Despite the broad risk-off move this week, borrowers continued flood the primary market. Nine deals for more than $17b priced this week, marking the busiest week since September 2025.
• An even bigger supply wave looms, with Paramount preparing to launch about $44b of investment grade and high-yield bonds early next week. It is already marketing a $7.5b term loan across USD and euros.
• Optimistic macro backdrop and higher yields would continue to support demand and keep spreads range bound, Brad Rogoff and Dominique Toublan of Barclays wrote in a Friday morning note.

(Bloomberg)  US Consumer Sentiment Falls on Worries About Prices, Economy

• US consumer sentiment fell in September to a four-month low amid deepening worries about rising prices and the outlook for the economy.
• The University of Michigan’s final sentiment index decreased to 48.1 in September from a month earlier, according to the survey released Friday.
• Consumers expect prices to rise 4.6% over the next year, up from 4% in the previous month. They also saw costs rising at an annual rate of 3.4% over the next five to 10 years, the highest since May.
• Consumer sentiment deteriorated in September as diesel prices hit a record and gasoline prices climbed. Higher prices at the pump are exacerbating workers’ longstanding frustrations about the cost of living in the US.
• Inflation remains stubbornly elevated. Prices are rising faster than paychecks, and mortgage rates have surged above 7%, pushing homeownership even further out of reach for many.
• “Despite political differences, consumers unanimously believe that the outlook for the economy has diminished,” Joanne Hsu, director of the survey, said in a statement.
• Since the start of the year, consumer sentiment has declined for all groups by age, education, geography, political party and income, according to the report.
• A gauge of the outlook for the economy in the year ahead slumped in September to the lowest since 2022. Consumers’ expectations for their personal finances also deteriorated.
• Buying conditions for durable goods improved slightly, but it was partly “due to a perception that completing such purchases now would help consumers avoid higher prices in the future,” Hsu said.
• An index of consumer expectations dropped to a four-month low, and the current conditions gauge also fell.
• The survey period includes responses from Aug. 25 to Sept. 21.

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.