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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
|
3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Credit Markets Steady Amid Other Chaos |
MORNINGSTAR - May 9, 2011 - By Dave Sekera
Even with mixed economic indicators and volatility in the commodities market, we continue to believe that corporate credit spreads will tighten.
Investors in the credit markets stepped aside last week and tried to make head or tail out of the extreme volatility in the commodities markets. The turmoil in commodities and foreign exchange was quite a show for those of us not involved in those markets. Over the course of the week, oil declined 14%, agricultural commodities slumped 7%, silver plummeted 27%, copper dropped 5%, and the euro fell 3%. The S&P 500 fell as much as 2.5% intraweek, but regained some ground Friday thanks to the strength in the jobs report and ended the week down 1.7%.
In all this chaos, the credit market was relatively steady as the Morningstar Corporate Bond Index was only off 1 basis point to +136 and credit spreads held their own and digested a relatively full plate of new issues.
Even with some mixed economic indicators earlier last week and volatility in the commodities market, we continue to believe that corporate credit spreads will tighten over the course of the year. Issuers have generally posted strong quarterly earnings and robust credit metrics, fixed-income mutual funds continue to receive a steady stream of inflows as investors demand income, and default rates continue to subside as there is an abundance of liquidity for the riskiest of high-yield credits.
As a testament of the strength in the corporate bond market and investors' willingness to stretch for yield by taking on greater credit risk, the highlight in the credit market last week was the unusual news of a deal for newspaper conglomerate Lee Enterprises (ticker: LEE) that couldn't get done. Considering that even the most highly leveraged buyouts of 2006 and 2007 have been able to refinance and extend maturities at lower rates and payment-in-kind toggle notes have resurfaced, it surprised many market participants to see a failed offering. From our point of view, it's encouraging to see investors push back on a transaction that did not warrant investment regardless of the yield.
Supporting our theme that most of the risk in the credit market this year will come from either merger and acquisition activity or self-inflicted credit deterioration, ConAgra (ticker: CAH, rating: A-) made an unsolicited bid for Ralcorp (ticker: RAH, rating: BBB+). ConAgra's $4.9 billion cash bid values Ralcorp at about 7 times EBITDA. If ConAgra is successful with its bid, we think its debt leverage pro forma for the acquisition will place the combined entity on the precipice between investment grade and high yield. Last we saw, ConAgra's 7% senior notes 2019 were trading at +180. On a probability-weighted basis that ConAgra is successful and weighting the potential for ConAgra's rating to slip below investment grade, we think the spread is too tight at these levels and could widen a further 25-50 basis points.
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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