US equity and fixed income markets focused on big-ticket economic releases in the week ended March 27. Equity indices fell for the week, driven by comments from Federal Reserve officials indicating that policymakers may move soon on hiking the federal funds rate. The S&P 500 index fell below 2,100. The S&P 500 index is tracked by the SPDR S&P 500 ETF (SPY) and the iShares Core S&P 500 ETF (IVV).
The NASDAQ Composite, which had breached the 5,000 level on March 20—for the first time in 15 years—ended down 2.7% for the week. The index was down over 3.2% up to March 26, but a pullback in biotech stocks like Alexion Pharmaceuticals (ALXN) and Regeneron (REGN) along with semiconductor stocks like Texas Instruments (TXN) and Avago Technologies (AVGO) on March 27 helped the index reduce its losses.
Treasuries barely move
Treasuries were pulled in opposite directions in the week leading up to March 27. While most economic indicators pushed Treasury yields down, weak five- and seven-year notes auctions pulled yields back up. Yield on the five-year Treasury note was unmoved for the week, while the yield on the 30-year bond rose three basis points. The iShares Barclays 20+ Year Treasury Bond Fund (TLT) fell 0.3% for the week, following a 3.8% rise in the previous week.
Volatility was also nearly flat in the week. The iPath S&P 500 VIX Short Term Futures ETN (VXX), which tracks volatility, rose just 0.04% for the week after having fallen by 8.40% in the previous week.
Along with Treasuries and investment-grade bonds, junk bond prices also rose in the week. Due to this rise, junk bonds and related ETFs like the SPDR Barclays Capital High Yield Bond ETF (JNK) and the iShares iBoxx $ High Yield Corporate Bond Fund (HYG) rose in the week ended March 27. This series will cover the impact of these releases on the primary and secondary markets for high-yield debt and leveraged loans.