High Yield Market Update

High Yield Daily Update

Posted on April 16, 2018 by Ron Heller

The high yield markets are better today, just like all of last week. Inflows are fueling the move higher, accompanying a tame 10-year Treasury yield where it continues to hold below 2.85%. U.S high-yield mutual and exchange traded funds saw a $989 million net inflow for the week ended April 11, according to Lipper.

Given the recent economic announcements are coming in line with projections, including today’s retail sales numbers, this has taken much of the fear out of the market that the Fed was leaning toward four rate rises rather than three as forecast. Oil traded at a 40 month high last week, which has helped that sector, as tech, telecom and heath care are the laggards.

Six-issue priced last week for only $2.92B in proceeds, but there was a lot going on in the world that kept companies on the sideline. Still over a half dozen names are in que, but we expect that this market will remain patchy as participants keep an eye on the geopolitical landscape, trade tariff talk, interest rates and their need to work around the earnings black-out periods.

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Although information and analysis contained herein has been obtained from sources Peritus I Asset Management, LLC believes to be reliable, its accuracy and completeness cannot be guaranteed. This report is for informational purposes only. Any recommendation made in this report may not be suitable for all investors. As with all investments, investing in high yield corporate bonds and loans and other fixed income, equity, and fund securities involves various risks and uncertainties, as well as the potential for loss. High yield bonds are lower rated bonds and involve a greater degree of risk versus investment grade bonds in return for the higher yield potential. As such, securities rated below investment grade generally entail greater credit, market, issuer, and liquidity risk than investment grade securities. Interest rate risk may also occur when interest rates rise. Past performance is not an indication or guarantee of future results. The index returns and other statistics are provided for purposes of comparison and information, however an investment cannot be made in an index.