Browsing articles tagged with "veteran-owned broker-dealer Archives - Mischler Financial Group"
Equities Market Forecast: Partial Clouds, Mostly Blue Skies; A Summer-Long Groundhog Day?
June 2017      Equities Market Commentary   

Peruzzi’s Perch June 23, 2017–We are finishing up a mixed bag week, with a Russell rebalance on Friday that is adding some trading volume and keeping us within striking distance of fresh all-time highs. Dow and S&P 500 index hit record closes on Monday before pulling back on Tuesday and trading mostly sideways the balance of the week.  The equities market forecast would seem to indicate ‘partial clouds, but mostly blue skies.” In turn, the continued lack of equities market volatility in the US and most other major markets is contributing to rising concerns voiced by contrarians,  “we remain in a state of continued complasence.” For those manning equities trading desks (and without the luxury of summer homes to escape to), this summer portends to be a scene from the Bill Murray film, Groundog Day.

larry-peruzzi-mischler-equitiies

Larry Peruzzi, Managing Director

Economic data was light, with decent May existing home sales numbers on Wednesday, mostly in line PMI on Friday, as well as better May new home sales.  The mid-month spike in the VIX index is also subsiding as we close out the week at the 10 level, down 13% over the last two weeks. So, after some political drama, Fed rate hikes and lower oil prices, the markets continued their pace of a flat yield curve, slowly rising equities and low inflationary pressures. Some investors, such as Fundstrat Global’s Thomas Lee are starting to question the market rally duration as he cut his 2017 and 2018 S&P 500 earnings outlook.

Oil remained weak, with WTI crude down about 7% the last 2 weeks. Oil’s decline in the past would have pressured markets, but weighting adjustments are allowing us to look past it. Currently the Energy sector weighting in the S&P 500 is down to 5.86%, so oil price weakness is somewhat insulated.

Some [latecomers?] have started to question the Trump agenda, as well as current valuations and earnings expectations. But, in spite of this we continue to see new money slowly enter the market.

Retail investors seem to be fearful of missing out on the rally. We will continue to watch the option markets to see if this sentiment changes.  The MSCI created some noise on Wednesday, when it approved a small weighting of Chinese A shares into the emerging market index, but it did not upgrade Argentina from frontier status to emerging status. The unexpected news in Argentina caused the Buenos Aires exchange to lose 4.8% on Wednesday, but by week’s end it had recouped 1.6% of that loss.

As we enter the final week of Q2, we expect to see some modest sector rotation and cash level adjustments. Next week we have a handful of Fed speakers out and about; Yellen, Williams, Harker and Kashkarei on Tuesday and Bullard on Thursday.

Economic highlights for the coming week are:

  • Monday              Durable goods and Dallas Fed
  • Tuesday              S&P Case Shiller home prices and  consumer confidence
  • Wednesday        Trade balance, pending home sales and wholesale inventories
  • Thursday            Q1 GDP and jobless claims
  • Friday                 Personal income and spending,  Michigan sentiment and Chicago Purchasing managers

It is increasingly feeling as though this market is dealing with 2 fears; (i) valuations are stretched beyond the earnings justifications and (ii) the lack of inflationary pressures will keep real rates low for the foreseeable future. Digging a little deeper, it looks like the latter is winning. Fed Funds are pricing in a 0% chance of a rate hike in late July and only a 16% probability of a hike in September. This could be setting us up for a Ground Hogs Day movie type of summer, same thing day after day. Rinse, Repeat, Rinse Repeat.

We do see some market reactions, such as sector rotation with Energy and Retail lagging and techs, financials and health care gaining. We have also seen some increased equity risk tolerance as money flows enter the more politically stable emerging markets.

So, as investors head to the beach they will keep one eye on the sky for approaching storms and one eye on the markets for the same, but the current picture seems to be blue skies for both.

 

Larry Peruzzi

Managing Director International Trading

Mischler Financial Group

Investment Banking | Institutional Brokerage

Ph:   1-617-420-8472 | Cell: 1-617-997-6318

Larry Peruzzi is a 20 yr global trading markets veteran and brings a unique perspective to global equities market commentary via Mischler Financial Group, the securities industry’s oldest minority broker-dealer owned and operated by service-disabled veterans.  Larry’s experience  and best execution perspective stems from his sitting on ‘both sides of the aisle.’  For more than half of Larry’s career, he ran buy-side trading desks for Standish Mellon and thereafter, The Boston Company. In both of those roles, Larry was responsible for implementing and managing international equities trade execution. Larry’s perspectives are frequently cited by the leading financial news publishers, including The Wall Street Journal, Bloomberg LP and Reuters

Mischler End of Week Equities Market Commentary via Peruzzi’s Perch June 23 2017 end-of-week edition is distributed via email to institutional investment managers and Fortune Treasury clients of veteran-owned broker-dealer Mischler Financial Group, the investment industry’s oldest  minority broker-dealer owned and operated by Service-Disabled Veterans.

Peruzzi’s Perch is a weekly synopsis of Everything Equities as seen from the perch of Mischler Financial Group’s International Equities Desk. Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, Peruzzi’s Perch is one of four distinctive content pieces produced by Mischler Financial Group

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Equity Markets Blink, But Remain Resilient-What’s Next? Peruzzi’s Perch Memorial Day Edition
May 2017      Equities Market Commentary   

Peruzzi’s Perch-May 26 2017-Memorial Day Edition: Equity Markets Blink But Remain Resilient In Wake of More Presidential Drama

Just when the markets looked ready to crack, along came President Trump’s first overseas trip. The trip to the Middle East and Europe came at the perfect time as it took market focus off of the administration’s follies and back on the economic fundamentals.

larry-peruzzi-mischler-equitiies

Larry Peruzzi, Managing Director

The FOMC minutes from the May 2-3 meeting on Wednesday showed that the FED seems to be on pace for a June 14 rate hike. The FED dismissed 1Q slower growth and felt that higher broader growth is on the horizon. While the probability a June hike slightly diminished after the release, by week’s end markets had priced in a 92% chance of a 25 bps hike.

The week also saw some retailing firms release earning, and on a whole, traditional retailers continue to lose market share but investors were encouraged by pockets of strength in a few names such as Best Buy (NYSE:BBY),  Home Depot (NYSE:HD), and of course, Amazon (NASDAQ:AMZN).

Crude oil’s 2 week rally rolled over as OPEC’s production cuts were seen as being insufficient. Last Saturday’s news that The United States sealed a multibillion arms deal with Saudi Arabia helped lift defense stocks such as Lockheed Martin (NYSE:LMT), General Dynamics (NYSE:GD) and Boeing (NYSE:BA) to all-time highs’. On the negative side, ISIS seemed to hit new lows in Manchester England and President Trump gave us some awkward moments at the NATO meeting on Thursday; neither was enough to keep the S&P 500 and NASDAQ from hitting new all-time highs. We continue to see institutional money flow into the market, but we also saw an uptick in retail flows entering the market. Overseas the U.K pond hit monthly low versus the Euro and U.S dollar on uncertain election polling numbers and Brazil’s bribery/ Presidential drama continues to amaze us.

Looking ahead to next week, a fair amount of data will be compressed into 4 days due to Monday’s Memorial Day holiday. April Personal Income and Spending, as well as May Conference Board consumer confidence on Tuesday gives us some insight onto the consumer sentiment and strength, while Dallas Fed manufacturing on Tuesday, Chicago Purchasing on Wednesday and May ISM manufacturing data on Thursday  will shed some light on manufacturing activity and health.

The highlight of the week will be on Friday with the release of May’s employment report. The FED has repeatedly stated that the largest factor in determining future rate hikes is the Payrolls numbers. With the long weekend and the Jobs report on Friday (providing we do not see any major news out of Washington),  trading volume will be skewed to the end of the week.

This week we looked at total U.S exchange volume versus the VIX index. It confirmed our belief that spikes in the VIX (May 15 to May 18) provided more trading opportunities as limits and Stops got triggered, and thus trading volumes spiked. This week however, the VIX has dropped back below 10 and trading volumes dropped by approximately 15%. Fed governors William, Brainard, Kaplin , Powel and Harker speak during the week, but investors seem to be locked in on a June 14th hike so we expect little new data from the Fed until then.

With the mid-month sell off followed by the late moth recovery investors have had to digest a lot of data points in trying to determine if we are under or overvalued. The long weekend will be welcomed, but we should not lose sight as to the meaning of the day as we honor the brave men and women who made the ultimate sacrifice.

Larry Peruzzi

Managing Director International Trading

Mischler Financial Group

Investment Banking | Institutional Brokerage

Ph:   1-617-420-8472 | Cell: 1-617-997-6318

Larry Peruzzi is a 20 yr global trading markets veteran and brings a unique perspective to global equities market commentary via Mischler Financial Group, the securities industry’s oldest minority broker-dealer owned and operated by service-disabled veterans.  Larry’s experience  and best execution perspective stems from his sitting on ‘both sides of the aisle.’  For more than half of Larry’s career, he ran buy-side trading desks for Standish Mellon and thereafter, The Boston Company. In both of those roles, Larry was responsible for implementing and managing international equities trade execution. Larry’s perspectives are frequently cited by the leading financial news publishers, including The Wall Street Journal, Bloomberg LP and Reuters

Mischler End of Week Equities Market Commentary via Peruzzi’s Perch March 09 2017 end-of-week edition is distributed via email to institutional investment managers and Fortune Treasury clients of veteran-owned broker-dealer Mischler Financial Group, the investment industry’s oldest  minority broker-dealer owned and operated by Service-Disabled Veterans.

Peruzzi’s Perch is a weekly synopsis of Everything Equities as seen from the perch of Mischler Financial Group’s International Equities Desk. Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, Peruzzi’s Perch is one of four distinctive content pieces produced by Mischler Financial Group

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Mischler Muni Market Update-Pending Municipal Debt Offerings Week of 05-01-17
May 2017      Muni Market   

Mischler Muni-bond Market Outlook for the week commencing 05.01.17 looks back to last week’s metrics and provides a lens focused on pending municipal bond offerings scheduled for the upcoming week. As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of prior week’s municipal debt activity, including credit spreads and money flows, and a curated view of pending municipal finance offerings scheduled for this week’s issuance.

Last week muni volume was about $7.9 billion. This week volume is expected to be $7.0 billion. The negotiated market is led by $1.1 billion taxable and tax exempt bonds for The Regents of the University of California. The competitive market is led by $150.4 million general obligation bonds for Milwaukee, Wisconsin on Thursday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

For reading ease, please click on image below

mischler-muni-bond-outlook-week-050117

To illustrate our presence within the Debt Capital Markets space: since 2014 alone,  Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE) and a recognized minority broker-dealer. Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

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Mischler Muni Market Outlook: Municipal Bond Offerings Scheduled Week of April 24
April 2017      Muni Market   

Mischler Muni-bond Market Outlook for the week commencing 04.24.17 looks back to last week’s metrics and provides a lens focused on pending municipal bond offerings scheduled for the upcoming week. As always, the Mischler Muni Market Outlook provides public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of prior week’s municipal debt activity, including credit spreads, money flows and a curated view of pending municipal finance offerings scheduled for this week’s issuance.

Last week muni volume was about $5.9billion. This week volume is expected to be $8.3 billion. The negotiated market is led by $3.9 billion taxable and tax exempt bonds for Kaiser Permanente. The competitive market is led by the Department of Transportation of Maryland selling $285.0 million bonds on Wednesday.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

For reading ease, please click on image belowmischler muni debt issuance week apr 24 2017

 

Mischler Financial Group debt capital market expertise includes Debt Origination, Distribution, Primary Market Access and Secondary Market trading across the full spectrum of fixed income markets. Our value-add is courtesy of our 18-member team of debt market veterans. a team that makes MFG’s Fixed Income Group a compelling partner to Fortune issuers, corporate treasurers, municipal debt market issuers and the world’s leading institutional investors.

To illustrate our presence within the Debt Capital Markets space: since 2014 alone,  Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE) and a recognized minority broker-dealer. Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

 

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Week’s IG Corporate Bond Issuance: Cooling Off Period; April Showers Bring May Flowers
April 2017      Debt Market Commentary   

Quigley’s Corner 04.21.17; This Week: A Cooling-Off for New IG Corporate Bond Issuance; April Showers Bring May Flowers!

 

Investment Grade New Issue Re-Cap – Back-to-Back Blanks for the IG Dollar DCM

The Best and the Brightest”  Fixed Income Syndicate Forecasts and Sound Bites for Next Week 

Today’s IG Primary & Secondary Market Talking Points

Syndicate IG Corporate-only Volume Estimates for Next Week

Indexes and New Issue Volume

This Week’s IG New Issues and Where They’re Trading

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending April 19th

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

 

What with the French Election this Sunday combined with today being a Friday session there was no new issuance to speak of in the IG dollar DCM. That’s now two consecutive days without IG issuance.  I was out for two Fridays so, today is the first “Best & Brightest” edition since March 31st.  Next week looks to be a relatively subdued one given continued blackouts and the fact that most all the big FIGs have already issued.  As corporates exit and Treasuries rally with yields set to pull down further, all this leads up to what should be a VERY ROBUST May.  The average for next week across the top 24 syndicate desks surveyed is $19.46b.  The high was one desk that thinks we’ll see $30b and the low came from two desks that both said $10-15b or an average of $12.5b. But why let me tell you?  I’m here for them. Please allow me to introduce you to the people who price YOUR deals.  They’re all waiting below with their numbers and thoughts for next week’s IG Corporate issuance.  So, without further ado folks…..let’s get to it!

Please remember to read the bold italicized question I posed to the Best & the Brightest as it contains this week’s complete data download that should be helpful to you.

 

The Best and the Brightest”  Syndicate Forecasts and Sound Bites for Next Week 

I am happy to announce that the “QC” once again received 100% unanimous participation from all 24 syndicate desks surveyed for today’s “Best & Brightest” edition!  19 of those participants are among 2017’s YTD top 20 ranked syndicate desks according to today’s Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table. 22 are in the top 25 in that same table.  The 2017 League table can be found on your terminals at “LEAG” + [GO] after which you select (US Investment Grade Corporates).  The participating desks represent 82.36% of all IG dollar-denominated new issue underwriting as of today’s table share percentage which simply means they’re the ones with visibility.  But it’s not only about their volume forecasts, it’s also about their comments!  This core syndicate group does it best; they know best; so they’re the ones you WANT and NEED to hear from.  It’s a great look at the week ahead.

*Please note that these are Investment Grade Corporates only. They do not include SSA issuance unless otherwise noted.

As always “thank you” to all the syndicate desks that participated in today’s survey.  I greatly appreciate your time to contribute and for making this edition of the “QC” among the most widely read! You are helping to promote Mischler’s value-added DCM proposition while adding readership to the “QC” that won Wall Street Letter’s Award as Best Broker Dealer Research in our financial services industry for three consecutive years! That’s 2014, 2015 and 2016 !!  More importantly, however, you are helping the nation’s oldest Service Disabled Veteran broker-dealer grow in a more meaningful and sustainable way.  So, thank you all! -RQ

My weekly technical data re-cap and question posed to the “Best and the Brightest” early this morning was prefaced as follows:

“Good morning and Happy Friday!

First, here are this week’s IG new issue volume talking points:

  • The U.S. six-pack banks posted overall positive earnings. This week five of those for banks – ex-GS who did not yet print – represented 59% of this week’s IG Corporate issuance or $14.75b vs. $25.04b.
  • MTD we’ve priced 63.6% of the syndicate IG Corporate mid-range projection for April or $58.192b vs. $91.50b.
  • The all-in MTD total (IG Corporates plus SSA) now stands at $69.092b.
  • The YTD IG Corporate only volume is now $451.277b.
  • YTD we have officially priced $575.243b in all-in IG Corporate and SSA issuance.

Here are this week’s five key primary market driver averages from the 21 IG Corporate-only deals that priced:

  • NICS:  3.57 bps
  • Oversubscription Rates: 2.00x
  • Tenors:  6.10 years
  • Tranche Sizes: $1,138mm
  • Spread Compression from IPTs to the Launch: <14.73> bps


Here’s how this week’s performance data compares against last week’s:

  • Average NICs widened 3.11 bps this week to 3.57 bps vs. 0.46 bps.
  • Over subscription or bid-to-cover rates, the measure of demand, reduced by1.48x to 2.00x vs. 3.48x. 
  • Average tenors shortened by a meaningful 4.04 years to 6.10 years vs. 10.14 years.
  • Tranche sizes increased by $347mm to $1,138mm vs. $791mm.
  • Spread compression from IPTs to the launch/final pricing of this week’s 22 IG Corporate-only new issues widened 4.58 bps to <14.73> bps vs. <19.31> bps.
  • Standard and Poor’s Investment Grade Composite Spreads widened 2 bps to +165 vs. +163.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 2 bps to 1.19 vs. 1.17. 
  • Week-on-week, BAML’s IG Master Index widened by 3 bps to +125 vs. +122. 
  • Spreads across the four IG asset classes widened 2bps to 18.00 bps vs. 16.00 bps as measured against their post-Crisis lows.. 
  • The 19 major industry sectors also widened by 3.53 bps to 23.16 vs. 19.63 also against their post-Crisis lows.
  • For the week ended April 19th, Lipper U.S. Fund Flows reported an inflow of $1.446b into Corporate Investment Grade Funds (2017 YTD net inflow of $43.426b) and a net outflow of $362.223m from High Yield Funds (2017 YTD net outflow of $4.271b).
  • Taking a look at the secondary trading performance of this week’s IG and SSA new issues, of the 22 deals that printed, 14 tightened versus NIP for a 63.75% improvement rate while 6 widened (27.25%) and 2 were flat (9.00%).

 

Entering today’s Friday’s session here’s how much we issued this week:

  • IG Corps: $25.04b
  • All-in IG (Corps + SSA): $25.54b

This Sunday is the first round of the French presidential election.  Congress returns to work on Monday in the continuing saga of Dysfunction Junction to address the debt ceiling, another rumored stab at repealing and replacing Obama Care, and any signs of tax reform. According to a very high end military official, the Korean peninsula has now reached  its most intense point since the Korean War.  Syria, Turkey, Russia loom large and a terror event that took place last evening in Paris, resulting in the death of a police officer in the heart of the city, are some of the major global event risk factors playing out in our inextricably global-linked world economy. 

Please let me know your thoughts and numbers for next week’s IG Corporate new issue volume.  Thank you in advance for your time. 

Have a great weekend!
Ron Quigley, Managing Director and Head of Fixed Income Syndicate

 

Below please find the replies to this week’s QC canvass of fixed income syndicate bookrunners and my synopsis of everything Syndicate and Secondary from today’s debt capital markets, including the investment grade corporate bond data drill down as seen from my seat here in Syndicate, Sales and DCM.

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Knowing the Past for the Future; The Nuclear Option; Rates Rally, Yields Compress
April 2017      Debt Market Commentary   

Quigley’s Corner 04.03.17 Dysfunction Junction & the Nuclear Option; Mischler Debt Market Commentary

 

Investment Grade New Issue Re-Cap – Knowing the Past for the Future; The Nuclear Option; Rates Rally, Yields Compress

IG Primary & Secondary Market Talking Points

Global Market Recap

NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending March 29th

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

UST Resistance/Support Table

Tomorrow’s Calendar

 

It was November 21st , 2013 when Democrats, frustrated at GOP efforts to stall its Congressional plans under former President Barack Obama, decided to take a vote to stop debate on executive and judicial branch nominees with a simple Senate majority vote rather than having to secure 60 Senate votes.  House Majority leader Harry Reid (D-Nevada), and his party won 52-48.  Reid & Co. set in motion a process that day that eased passage of several key Obama executive and judicial nominees by changing the rules of engagement. Politicians have LONG memories and it’s now payback time…..and guess which party doesn’t like it?  With the tables now turned, the so-called nuclear option –a simple majority – is likely to prevail under Senate Majority leader Mitch McConnell to avoid a Democratic filibuster of Judge Gorsuch’s nomination to the Supreme Court. It may also be used for legislation as well.  Remember everyone, Harry Reid set the precedent.  The “nuclear option” or simple majority vote will weaken the power of the filibuster but it is officially in play now.

As a result, Treasuries rallied and the CT10yr is yielding 2.34%. That’s down 28 bps since the Monday before the FOMC rate hike on Wednesday March 15th.  It’s on its way lower, much lower so, issuers be advised to watch that. Be patient. Let the market come to you.  All this thanks to “Dysfunction Junction.”  The great divide between Republicans and Democrats is getting deeper and more disparate as threats of filibusters are inviting the GOP to employ the aforementioned “nuclear option” to their arsenal.  Republicans remember all too well Democratic hardball strategies used against them in the recent past. Political campaign promises need to be kept and not danced around.  The Dems will NEVER forget (and vice versa) and as they say pay back is going to be………a well, uh…………an issue shall I say?  What goes around, comes around but in the here and now, the nuclear option will be deployed and used to pass legislation as well.  Political dislocation will continue to rally rates and compress Treasury yields lower.  @.00% is in sight folks.  I’ll remind you when we get there.

If you are a banker advising issuers when to print, if they wait, you’ll look smarter and more brilliant than ever! If you’re an issuer, well, when you do print, if you listen to the “QC” please give us an ACTIVE Co-Manager opportunity on your next deal so we can show you what a true distribution value is all about.  You WILL only look even better and brighter than you already are.  One doesn’t get what one doesn’t ask for in life right?

The Monday session featured a continuum of “quirky” issues with the exception of Met Life Global Funding’s 5-year FA-backed notes.  Investment Grade primary markets currently have 10 items in the pipeline all of which are Yankee transactions.

Today, the IG DCM hosted 5 issuers across 5 tranches totaling $2.75b or 12.85% of this week’s IG Corporate-only midpoint syndicate forecast calling for $21.40b.

IG Primary & Secondary Market Talking Points

 

  • Essex Portfolio LP upsized today’s 10-year Senior Notes new issue to $350mm from $300mm at the launch and at the tightest side of guidance.
  • The average spread from IPTs and/or guidance thru the launch/final pricing of today’s 5 IG Corporate-only new issues was <20.30> bps.
  • BAML’s IG Master Index widened 2 bps to +124 vs. +122.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS widened 1 bp to 1.18 vs. 1.17.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +164.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $19.6b on Friday versus $19.3b on Thursday and $13.8b the previous Friday.
  • The 10-DMA stands at $17.7b.

 

Global Market Recap

 

  • U.S. Treasuries – USTs built on Friday’s rally.
  • Overseas Bonds – Front end JGB’s hit. Core & semi core EU bonds had a strong day.
  • Stocks – U.S. stocks closed in the red but had a nice afternoon comeback.
  • Overseas Stocks – Japan & HS closed higher. China was closed. Europe was red.
  • Economic – ISM manufacturing dipped 0.5 points but remained very strong. Vehicle sales were weak.
  • Overseas Economic – Good Tankan in Japan & positive unemployment rates in Europe.
  • Currencies – USD outperformed the Pound, CAD & AUD and lost ground vs. the Euro & Yen.
  • Commodities – Down day for CRB, crude oil & copper while gold closed with a gain.
  • CDX IG: +0.37 to 66.70
  • CDX HY: +0.47 to 339.04
  • CDX EM: +0.83 to 213.60

*CDX levels are as of 3:30PM ET today.

-Tony Farren

 

Syndicate IG Corporate-only Volume Estimates for This Week and April

 

IG Corporate New Issuance This Week
4/03-4/07
vs. Current
WTD – $2.75b
April 2017
Forecasts
vs. Current
MTD – $2.75b
Low-End Avg. $20.35b 13.51% $90.25b 3.05%
Midpoint Avg. $21.40b 12.85% $91.50b 3.01%
High-End Avg. $22.44b 12.25% $92.75b 2.96%
The Low $12b 22.92% $65b 4.23%
The High $31b 8.87% $111b 2.48%

 

It’s a Tough Job But Somebody’s Gotta Do It

It’s not always fun writing about politics but then again, politics is driving everything in our market more than ever before and it will continue to do that.  Given the myriad global risk factors playing out in our inextricably global-linked world economy, it’s safe to say we are living in dangerous times.  For my part, all I can do is try and tell you about what’s going on in a genuinely honest, insightful and hopefully, refreshing way.  Why?  Well, if you see that we “get it” i.e. understand the machinations of global markets, and appreciate that we work every day to get fresh and informative perspectives to you,  in turn you’ll notice the distinct added-value that we provide and ideally, you will conclude that we should be appointed to the list of other formidable syndicate desks you have chosen to distribute your offerings.

We might be a minority firm, but we are NOT a “one check shop.”  Mischler has a long history in which we have earned Fortune Issuers’ mandates by demonstrating best-in-class cap mkt capabilities via a proven process and recognized platform. As the nation’s oldest Service Disabled Veteran broker-dealer, our ethos is dedicated to serving not just clients with integrity, but also in-need veteran organizations. Towards that mission, we give back 10% of our firm’s profits to veteran causes year round. When hiring for roles within the organization, we prioritize hiring service-disabled veterans and recently-returning veterans who meet our criteria. Once hired, we mentor and coach up our veteran compatriots and we integrate them into becoming members of our team because they earned the opportunity. We grow our own capital month-to-month, quarter-to-quarter and year-to-year. Our operations staff is second to none; it’s not just about our getting underwriter roles for Issuer deals, more important to all, it’s about settling the trade on trade date to settlement date smoothly, each and every time.  We also take great pride in sharing with clients our daily fixed income “downloads”; content that has earned Mischler the Wall Street Letter Award for Best Broker Dealer/Research for three consecutive years – 2014, 2015  and 2016.  It’s all about a value-added proposition.

 

Below please find my synopsis of everything Syndicate and Secondary from today’s debt capital markets, including the investment grade corporate bond data drill down as seen from my seat here in Syndicate, Sales and DCM.

 

Have a great evening!
Ron Quigley

 

NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches

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Municipal Debt Deals Week of April 03- Mischler Muni Market Update
April 2017      Muni Market   

Mischler Muni-bond Market Outlook for the week commencing 04.03.17 looks back to last week’s metrics and provides a lens focused on pending municipal debt deals scheduled. As always, the Mischler Muni Market snapshot provides public finance investment managers, institutional investors focused on municipal debt and municipal bond market participants a summary of prior week’s municipal debt activity, including credit spreads, money flows and a curated view of pending municipal finance offerings scheduled for this week’s issuance.

Last week muni volume was about $5.1 billion.  This week volume is expected to be $7.3 billion.  The negotiated market is led by $778.0 million general obligation bonds for The Commonwealth of Massachusetts, including $100 million new money green bonds.  The competitive market does not have any deals over $100 million.

Below and attached is neither a recommendation or offer to purchase or sell securities. Mischler Financial Group is not a Municipal Advisor. For additional information, please contact Managing Director Richard Tilghman at 203.276.6656

 

For reading ease, please click on image belowmuni-market-mischler

Mischler Financial Group debt capital market expertise includes Debt Origination, Distribution, Primary Market Access and Secondary Market trading across the full spectrum of fixed income markets. Our value-add is courtesy of our 18-member team of debt market veterans. a team that makes MFG’s Fixed Income Group a compelling partner to Fortune issuers, corporate treasurers, municipal debt market issuers and the world’s leading institutional investors.

To illustrate our presence within the Debt Capital Markets space: since 2014 alone,  Mischler has led, co-managed and/or served as selling group member for more than $600 Billion (notional value) in new debt and preferred shares issued by Fortune corporations, as well as debt issued by various municipalities and US Government agencies.

Mischler Financial Group is a federally-certified Service-Disabled Veteran Owned Business Enterprise (SDVOBE) and a recognized minority broker-dealer. Mischler Muni Market updates are provided as a courtesy to institutional clients of Mischler Financial Group, Inc.

This document may be not reproduced in any manner without the permission of Mischler Financial Group. Although the statements of fact have been obtained from and are based upon sources Mischler Financial Group believes reliable, we do not guarantee their accuracy, and any such information may be incomplete.  All opinions and estimates included in this report are subject to change without notice.  This report is for informational purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security.   Veteran-owned broker-dealer Mischler Financial Group, its affiliates and their respective officers, directors, partners and employees, including persons involved in the preparation of this report, may from time to time maintain a long or short position in, or purchase or sell a position in, hold or act as market-makers or advisors or brokers in relation to the securities (or related securities, financial products, options, warrants, rights, or derivatives), of companies mentioned in this report or be represented on the board of such companies. Neither Mischler Financial Group nor any officer or employee of Mischler Financial Group or any affiliate thereof accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

 

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Best Quarter EVER- Investment Grade Corporate Debt Issuance; Mischler DCM Comment
March 2017      Debt Market Commentary   

Quigley’s Corner 03.30.17 – Top Ranked Quarter Ever for US IG Corp Issuance

 

Investment Grade New Issue Re-Cap – Q1 2017 Finishes as the #1 Ranked Quarter for IG Corporate-only and All-In IG Issuance.

On This Week’s Hawkish Fed-Speak

Point Counter-Point

IG Primary & Secondary Market Talking Points

Global Market Recap

NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches

Syndicate IG Corporate-only Volume Estimates for This Week and March

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending March 22nd

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

6 IG Corporate issuers tapped the IG dollar DCM today pricing 12 tranches between them totaling $6.00b.  There was no activity from the SSA space.

 

  • “CHTR” (Ba1/BBB-/BBB-) rated 144a/REGS 30-year Senior Secured Notes new issue due 5/01/2047.  The deal was upsized to $1.25b from $750mm at the launch and at the tightest side of guidance. (Mischler served as passive co-manager)
  • CCO Holdings LLC/Capital Corp. (Charter Communications) High Yield-rated (B1/BB+/BB+) 144a/REGS tap of its 5.125% 10-year Senior Notes due 5/01/2027.  We thank the issuer for our inclusion. (Mischler served as passive co-manager)
  • The IG Corporate only WTD total is now over 83% of the syndicate midpoint average forecast or $22.15b vs. $26.50b.
  • MTD, we are now more than 13% above the IG Corporate mid-range syndicate projection for all of March or $129.998b vs. $114.31b. (scroll to the table below).
  • The all-in MTD total (IG Corporates plus SSA) now stands at $166.158b. March, 2017 has officially broken into 8th place as the highest volume month for all-in issuance (IG Corporates plus SSA).
  • The YTD IG Corporate only volume is now $393.085b. It is the highest quarterly volume total in history.
  • YTD we have officially priced $506.151b in all-in IG Corporate and SSA issuance also ranking it #1 as the highest quarterly volume total ever.

 

On This Week’s Hawkish Fed-Speak

 

Today, crude oil hit a 3-week high, gold slipped, equity markets were all in the black and U.S. Treasury yields compressed while the dollar strengthened.  Most all of that reflects the fluctuations of our fluid daily market gyrations.  Net, net, though it was a good day.  However, what garnered all the attention today – as it did all week – was the sudden overwhelmingly hawkish Fed-speak from just about every Fed member.  Yesterday, Boston FRB President Eric Rosengren said a rate increase at every other FOMC meeting this year “could and should be the committee’s default unless data change.” There are eight meetings left this year implying four additional rate hikes. He also said, four hikes in 2017 would be gradual but “more regular.” The market, however, is expecting 2.5 at the most!  The Fed is a laggard; the market is always accelerated.  Europe, meanwhile is worrying that its recent tiny monetary adjustments have investors concerned of a rate rise for still suffering laggard peripheral EU member economy’s.  They are clearly not home free by any stretch of the imagination. ……..and we do live in an inextricably global-linked world economy.

So, now let’s link all that to today’s major talking points from statements made by the Fed’s William Dudley –

 

  • Dudley says, “growth and inflation risks may be shifting to the upside.”
  • He is more confident that inflation is settling near its goal, medium-term.
  • “Forward-looking data points to further job-market gains.”
  • Calls job gains “sturdy” and labor market slack “diminishing.”
  • Says the Federal Reserve is not “removing the punch bowl, yet.”
  • Comments that the “economic outlook abroad also appears brighter.”
  • The Fed shouldn’t overreact to every “wiggle” in markets.
  • Fed cares about financial condition effects on the economy.
  • Fiscal policy is likely to shift in time to more stimulus.
  • Favors tapering reinvestments instead of an abrupt end to them

 

Point Counter-Point

The takeaway is that Fed-speak is clearly very hawkish.  That pervasive sentiment among FOMC members gives reason to pause.  Here is the point counterpoint of all this –

Several times I re-printed the following comment from a six-pack bulge bracket U.S. bank Chairman.  I also pointed out the banker is either from BAML, CITI, GS, JPM, MS or WFS.  I will always preserve anonymity folks. To clarify, no one person has tomorrow’s news today, BUT this person has a firm grip on what IS going on in the world and a track record that’s perhaps second to none. Here’s a re-print of what the Chairman said in the “QC” dated Friday, March 3rd, 12 days in advance of the most recent FOMC Rate Decision,

“Everyone is thinking a rate hike is coming in March but, the FED needs to be somewhat worried about the yield curve.  When they raised rates in December 2015 the 10yr Treasury rallied 70 bps in yield, thus crushing banks’ net interest margin or “NIM” and, having the effect of dampening growth.  When they raised rates this past December 2016, that did not happen…..instead all rates moved up a bit.  But when Yellen talked about March being a “live meeting’’, the UST 10 year went from 2.56% to 2.31%……The Fed needs to talk a good game to dampen the “animal spirits” that have elevated equity markets but, I really don’t think the Fed wants to raise rates and see the 10 year Treasury move to 2.25%. As a result, it’s a very close call…..I err on the side of thinking that the rate hike comes in June.  But, it’s  close.  If the Fed is committed to 2 to 3 hikes this year and they feel the markets are fully prepared for a March hike…they may just take advantage of that window.”

It seems that this week the historically lagging Fed is clearly attempting to talk up U.S. Treasury yields because they KNOW the CT10-year yield is going to go down…..down…..down much like it did in 2015, though perhaps not as dramatically.  Therefore, take what you are hearing with a massive grain of salt.  The market is priming itself for issuance.  As yields fall, and deals are well-priced, investor appetite remains voracious for better rated IG corporate credits.  There should be a robust amount of issuance ahead of black-outs as we head toward the Easter break.  The opportunities are creating themselves in here and the Fed doesn’t like what it sees from their prior December 2015 experience.  That’s why they ARE talking up yields.  It’s also why yields WILL contract.  The inference is clear – the Fed talks the talk but they will not walk the walk. And that’s how it is folks.

 

IG Primary & Secondary Market Talking Points

 

  • The average spread from IPTs and/or guidance thru the launch/final pricing of today’s 12 IG Corporate-only new issues was <17.67> bps.
  • BAML’s IG Master Index was unchanged at +122.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.17.
  • Standard & Poor’s Investment Grade Composite Spread was unchanged at +164.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $20.7b on Wednesday versus $18.4b on Tuesday and $19.2b the previous Wednesday.
  • The 10-DMA stands at $17.3b.

 

Global Market Recap

 

  • U.S. Treasuries – Down day for USTs led by the 30yr for a host of reasons.
  • Overseas Bonds – JGB’s closed down. Mixed session in Europe.
  • Stocks – Solid gains heading into the close.
  • Overseas Stocks – Weak session in Asia. Europe closed with gains.
  • Economic – Personal consumption moved higher. Inflation data inched higher.
  • Overseas Economic – German CPI lower than expected/last. Big global calendar tomorrow.
  • Currencies – USD mixed vs. the Big 5 but a solid rally for the DXY Index.
  • Commodities – Good day for crude oil (back over 50) & bad day for gold.
  • CDX IG: -0.92 to 66.86
  • CDX HY: -4.28 to 337.98
  • CDX EM: -2.73 to 209.24

*CDX levels are as of 3:30PM ET today.

-Tony Farren

 

Syndicate IG Corporate-only Volume Estimates for This Week and March

 

IG Corporate New Issuance This Week
3/27-3/31
vs. Current
WTD – $22.15b
March 2017
Forecasts
vs. Current
MTD – $129.998b
Low-End Avg. $25.25b 87.72% $113.79b 114.24%
Midpoint Avg. $26.50b 83.58% $114.31b 113.72%
High-End Avg. $27.75b 79.82% $114.83b 113.21%
The Low $15b 147.67% $80b 162.50%
The High $31b 71.45% $140b 92.86

 
Below please find my synopsis of everything Syndicate and Secondary from today’s debt capital markets, including the investment grade corporate bond data drill down as seen from my seat here in Syndicate, Sales and DCM.

Have a great evening!
Ron Quigley, Managing Director and Head of Fixed Income Syndicate

 

NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches

 

Here’s a review of this week’s five key primary market driver averages for IG Corporates only through Wednesday’s session followed by the averages over the prior six weeks:

KEY IG CORPORATE
NEW ISSUE DRIVERS
MON.
3/27
TUES.
3/28
WED.
3/29
AVERAGES
WEEK 3/20
AVERAGES
WEEK 3/13
AVERAGES
WEEK 3/06
AVERAGES
WEEK 2/27
AVERAGES
WEEK 2/20
AVERAGES
WEEK 2/13
New Issue Concessions 0.00 bps/flat 2.60 bps 1.39 bps 1.75 bps 0.00 bps 1.17 bps <3.15> bps <0.16> bps <0.86> bps
Oversubscription Rates 2.00x 3.76x 3.53x 2.90x 3.08x 2.73x 3.39x 3.26x 3.76x
Tenors 3.00 yrs 11.65 yrs 8.10 yrs 11.55 yrs 10.05 yrs 9.65 yrs 8.04 yrs 8.37 yrs 8.03 yrs
Tranche Sizes $500mm $727mm $475mm $692mm $859mm $671mm $738mm $695mm $744mm
Avg. Spd. Compression
IPTs to Launch
<17.50> bps <20.87> bps <19.12> bps <15.44> bps <17.99> bps <20.00> bps <16.79> bps <18.47> bps <18.45> bps

 

New Issues Priced

 

Today’s recap of visitors to our IG dollar Corporate and SSA DCM:

Please Note: for ratings I use the better two of Moody’s, S&P or Fitch.
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Corporate Debt Issuance Slows Due to DC Swamp Sewage Stalemate
March 2017      Debt Market Commentary   

Quigley’s Corner 03.27.17 -Corporate Debt Issuance Slows Due to DC Swamp Sewage Stalemates

 

Investment Grade Corporate Debt New Issue Re-Cap – IG Primary Markets Bogged Down by the Swamp

CT10 Year Yield Going Lower

IG Primary & Secondary Market Talking Points

Global Market Recap

Syndicate IG Corporate-only Volume Estimates for This Week and March

New Issues Priced

Indexes and New Issue Volume

Lipper Report/Fund Flows – Week ending March 22nd       

IG Credit Spreads by Rating

IG Credit Spreads by Industry

New Issue Pipeline

M&A Pipeline

Economic Data Releases

Rates Trading Lab

Tomorrow’s Calendar

 

Well it was a rare, highly inactive Monday for IG primary markets today. Only one well-telegraphed new issue priced that had been in the pipeline for KEB Hana Bank in the form of a $500mm 3-year FRN. I heard that as many as 10 issuers stood down today following Go/No Go calls.  So, what gives?

On Friday, I placed at the top of my edition, a comment from a widely respected Head of Syndicate.  It was an interesting comment in that it expressed an against-the-grain opinion that Friday’s healthcare bill issue might actually be good for the market in that it pulls forward focus and attention on the all-important and market impactful tax reform bill.  As we were getting ready to close shop on Friday my CEO asked me, “so do you think it’ll be busy next week?  I said, “I hate to go against 24 of the top syndicate desks, but I fear we could see a zero day on Monday and a slower week in store. A health care bill failure will send a horrible message to the market.” I added, “I hope I’m wrong and that we see lots of issuance, but I think I’m right.”  That’s how Friday ended as I left for the weekend.

First, let’s revisit my Friday syndicate voting brackets for this week’s IG new issue volume forecasts:

Next Week
3/27-3/31
1: 20b
1: 15-30b
2: 20-25b
8: 25b
6: 25-30b
5: 30b
1: 31b

 

Out of 24 desks surveyed, 19 of them, or 79%, were in a tight band of $25-$30b.  That is always a great sign.  It means a lot of joint leads verified that similar or consensus volume is expected. The comments were characterized by lots of smaller deals with the absence of any mega transaction. But, I cannot see how issuance gets done if the health care bill is pulled or doesn’t pass. Well it got pulled later on Friday as we now all know. The issue is that republicans made a mistake in prioritizing health care as the first item on their agenda. They did so because it was perceived internally as a “no brainer.” Their plan was to save a trillion dollars to justify a massive tax reform plan.  Guess what?  When it got pulled the message sent to Wall Street was that consensus will continue to be an issue within the GOP.  That’s a MAJOR problem. The historic election is now over. People no longer want to hear the same campaign rhetoric, rather they want action, as the power to legislate has been voted on and given to Trump and the GOP.  The first test was a failure. In fact, it is a massive failure.  So, the market will not be kind to an Administration that has now experienced it’s “Dysfunction Junction” wake-up call. (I refuse to call it Capitol Hill or The Beltway anymore). It’s all about action now. Failure to get a consensus on tax reform WILL lose House and Senate seats in the next elections. That would be a political disgrace after the 7 long years they had amongst themselves to one day ratify a revamped bill. That day came and went last Friday.

The result? ………..The CT10-year is going back to 2.00% to 2.10% or lower.  Here’s the challenge –  with as many as 10 Go/No Go calls this morning that wound up with issuers standing down, we risk building a congested pipeline.  That leads to creating additional congestion, sloppy deals, more concession and bankers could look bad advising clients to go now rather than wait for another 25-35 bps rally in yields. Let the market come to the issuer. The latter are in the driver’s seat.  The market is waiting for a sign of optimism. That optimism will come when positive sounders on SUBSTANTIALas in “historic” – tax reform emanates from the White House and Dysfunction Junction. When that happens, equities will rally, yields will climb quickly and we’ll be back to where the GOP wants to be. For now, the Republican Party IS part of the Swamp that desperately needs draining.  It’s a harsh but well-deserved wake-up call to get their act together.  Seven years to fix Obama Care and they come up holding nothing but a yanked deal.  Unbelievable folks!  When that happens in business people get fired fast! Trump needs to run things like a corporation and Dysfunction Junction needs a hard case of tough love. This is not what was voted for on election day. It’s all about well……….waste management………now.

 

CT10 Year Yield Going Lower

rates-going-down-mischler-debt-market

Sorry if I sound like a broken record, but I published this next piece 12 days in advance of the recent FOMC Rate Decision on Friday, March 3rd and re-printed it the day of Janet Yellen’s Press Conference on Wednesday, March 15th.  Here it is yet again:

………..I had an interesting and revealing conversation with a Chairman of a six-pack bank (That’s either BAML, CITI, GS, JPM, MS or WFS folks!) who shared thoughts on a potential March interest rate hike that the market has already built in.  I thought it would be helpful and informative to you all.  Here’s what that person said,

“Everyone is thinking a rate hike is coming in March but, the FED needs to be somewhat worried about the yield curve.  When they raised rates in December 2015 the 10yr Treasury rallied 70 bps in yield, thus crushing banks’ net interest margin or “NIM” and, having the effect of dampening growth.  When they raised rates this past December 2016, that did not happen…..instead all rates moved up a bit.  But when Yellen talked about March being a “live meeting’’, the UST 10 year went from 2.56% to 2.31%……The Fed needs to talk a good game to dampen the “animal spirits” that have elevated equity markets but, I really don’t think the Fed wants to raise rates and see the 10 year Treasury move to 2.25%. As a result, it’s a very close call…..I err on the side of thinking that the rate hike comes in June.  But, it’s  close.  If the Fed is committed to 2 to 3 hikes this year and they feel the markets are fully prepared for a March hike…they may just take advantage of that window.”

Today the CT10-year closed at 2.379% and has tightened 24.8 bps versus 2.627% on March 13th the Monday before the Fed raised rates. It’s going tighter. Issuers be patient!

IG Primary & Secondary Market Talking Points

 

  • The average spread from IPTs and/or guidance thru the launch/final pricing of today’s 1 IG Corporate-only new issues was <17.50> bps.
  • BAML’s IG Master Index was unchanged at +123.  +106 represents the post-Crisis low dating back to July 2007.
  • Bloomberg/Barclays US IG Corporate Bond Index OAS was unchanged at 1.18.
  • Standard & Poor’s Investment Grade Composite Spread tightened 1 bp to +164 vs. +165.  The +140 reached on July 30th 2014 represents the post-Crisis low.
  • Investment grade corporate bond trading posted a final Trace count of $13.8b on Friday versus $17.8b on Thursday and $15.2b the previous Friday.
  • The 10-DMA stands at $17.4b.

 

Global Market Recap

 

  • U.S. Treasuries – Closed with gains except the 2yr but closed near the low prices of day.
  • Overseas Bonds – JGB’s better except the 30yr. Bunds red & Gilts green.
  • Stocks – U.S. stocks mixed heading into the close. Nice comeback in the afternoon.
  • Overseas Stocks – The Nikkei led Asia lower. Europe had more red than green.
  • Economic – Dallas Fed manufacturing was weaker than expected/last.
  • Overseas Economic – Positive IFO releases in Germany.
  • Currencies – The USD had a poor day vs. the Euro, Pound & Yen.
  • Commodities – Crude down, gold up & a 2% gain for silver.
  • CDX IG: +0.83 to 67.84
  • CDX HY: +29.80 to 354.58
  • CDX EM: +1.72 to 213.92

*CDX levels are as of 3:30PM ET today.

-Tony Farren

 

Syndicate IG Corporate-only Volume Estimates for This Week and March

 

IG Corporate New Issuance This Week
3/27-3/31
vs. Current
WTD – $0.50b
March 2017
Forecasts
vs. Current
MTD – $108.348b
Low-End Avg. $25.25b 1.98% $113.79b 95.22%
Midpoint Avg. $26.50b 1.89% $114.31b 94.78%
High-End Avg. $27.75b 1.80% $114.83b 94.36%
The Low $15b 3.33% $80b 135.43%
The High $31b 1.61% $140b 77.39%

 
Below please find my synopsis of everything Syndicate and Secondary from today’s debt capital markets, including the investment grade corporate bond data drill down as seen from my seat here in Syndicate, Sales and DCM.

 

 

Have a great evening!
Ron Quigley

 

NICs, Bid-to-Covers, Tenors, Sizes and Average Spread Compression from IPTs thru Launches

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Equity Market Drivers: Sentiment, Spending and Politics; Peruzzi’s Perch
March 2017      Equities Market Commentary   

What’s Next for Stocks? Equity Market Drivers-It’s all about Sentiment, Spending and Politics…

larry-peruzzi-mischler-equitiies

Larry Peruzzi

U.S and global markets experienced a classic risk reversal trade on Tuesday as investors re-priced the probability of a reduction in taxes. Investors took profits and reduced their risk exposure by knocking the Dow down 1.14% and the S&P 500 by 1.24% on Tuesday.  The S&P 500 and Dow Jones Industrials ended their historic streak of 110 sessions without a 1% decline. Crude oil continued its decline with WTI crude down 3.1% over the first 4 days of the week. Energy, the worst-performing sector this year, has fallen by about 8% year to date. The economic front was largely void of any market moving numbers.

The housing sector did release some contradictory numbers as Wednesday’s existing home sales in February registered a 3.7% decline, but Thursday new home sales surged 6.1%. Who wants used when you can have new?  As the week came to an end, more uncertainty was created as the House GOP leaders looked to vote on Friday on their health-care bill, while not knowing for sure they have enough votes to pass it. As we have learned time and time again, markets greatly despise uncertainty.

Further evidence of the risk reversal trade can be seen in Gold’s trading action, as the precious metal is up 3.25% over the last 2 weeks. The week will also be remembered for what might have been the beginning stages of an end to an era when Sears Holdings had its worst decline in 2 years. Sears said there was “substantial doubt” about its future. Sears was once the world’s largest retailer over its 131 year history. With the Fed’s rate hike behind us and the next meeting not until May 3rd and 1Q earnings still a few weeks’ away, investors will continue to ponder their risk tolerance in these highly partisan political times.  Friday was an active day for Fed governors with Bullard, Dudley, Williams and Evans speaking.

Next week will be equally active for the Fed, with 12 speeches by governors, culminating with Chair Yellen speaking on Tuesday.  With the market drivers changing over the last couple of weeks, I think what the market and investors will be concentrating on is sentiment, spending and politics. Tuesday’s March Conference Board consumer confidence and Friday’s March Michigan sentiment readings should give us a good idea how the public views the economy, while Wednesday’s February pending home sales and Thursday 4Q personal consumption, followed by Friday’s February Personal Spending will be a good indication of how much the recent market rally has buoyed the consumption and spending.

The political front remains divided by party lines and reforms in taxes, healthcare, immigration and a Supreme Court nominee are at risk. As we watch a few key economic numbers and Fed speeches, we will be closely monitoring the shenanigans out of Washington. Quarter-end on Friday is normally “meet with portfolio managers” who will be making some last minute adjustments to portfolio holding and cash levels. I would expect trading volumes to increase as the week progresses.

There is a lot to digest for a market that looks like it is being stymied by a fork in the road.

Larry Peruzzi

Managing Director International Trading

Mischler Financial Group

Investment Banking | Institutional Brokerage

Ph:   1-617-420-8472

Larry Peruzzi is a 20 yr global trading markets veteran and brings a unique perspective to global equities market commentary via Mischler Financial Group, the securities industry’s oldest minority broker-dealer owned and operated by service-disabled veterans.  Larry’s experience  and best execution perspective stems from his sitting on ‘both sides of the aisle.’  For more than half of Larry’s career, he ran buy-side trading desks for Standish Mellon and thereafter, The Boston Company. In both of those roles, Larry was responsible for implementing and managing international equities trade execution. Larry’s perspectives are frequently cited by the leading financial news publishers, including The Wall Street Journal, Bloomberg LP and Reuters

Mischler End of Week Equities Market Commentary via Peruzzi’s Perch March 09 2017 end-of-week edition is distributed via email to institutional investment managers and Fortune Treasury clients of veteran-owned broker-dealer Mischler Financial Group, the investment industry’s oldest  minority broker-dealer owned and operated by Service-Disabled Veterans.

Peruzzi’s Perch is a weekly synopsis of Everything Equities as seen from the perch of Mischler Financial Group’s International Equities Desk. Cited by Wall Street Letter in each of 2014, 2015 and 2016 for “Best Research / Broker-Dealer”, Peruzzi’s Perch is one of four distinctive content pieces produced by Mischler Financial Group.
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