Lynn Noah

Treasury yields fell across the yield curve for the week ended October 16, as US industrial production for September declined. Demand for safe-haven assets rose amid global uncertainty.

China’s foreign reserves rose by $13.5 billion in June to $3.2 trillion. June’s increase was the largest in 14 months.

Investor flows into high-yield bond funds were positive for the week ended July 6, 2016, after three consecutive weeks of negative outflows.

China’s consumer price index (or CPI) rose to 1.6% year-over-year in September, mainly due to higher food prices and not improvement in economic activity.

Treasury yields rose marginally across the yield curve in the week ended July 10, 2015. The demand for safe-heaven securities dropped.

The three US equity indices that we review in this weekly series fell from December 8 to December 15, 2015, after a rebound in oil prices.

The US Treasury holds monthly auctions of three-year Treasury notes. The latest auction was held on July 7.

Investors are flocking to safe-haven assets such as Treasuries (DRGBX) (TLT) and gold (IAU).

According to data from Lipper, leveraged loan funds saw an outflow for the seven days ended November 18, making them the 17th occurrence of such outflows.

On July 8, ten-year Treasury notes worth $21 billion were auctioned—the same as the previous week.

Last week, high-grade bond yields rose after upbeat US inflation and retail sales data raised the possibility of a rate hike by the year’s end.

Treasury yields rose across the yield curve—except for one-month T-bills, three-month T-bills, and three-year T-notes—in the week ending December 31.

US Treasury yields rose across the yield curve for the week ended July 15, 2016, as robust US consumer inflation and retail sales data revived expectations that the Fed could raise interest rates this year.

The SSE Composite Index fell by 12.3% from January 6 to January 13, 2016, and closed at $2,949.60 on January 13 on concerns about China’s economic growth.

The total net outflows from leveraged loan funds in 2015 stood at $16.4 billion. This was marginally higher than the $16.2 billion recorded in 2014.

According to the National Bureau of Statistics, China’s industrial profits for firms above a designated size rose by 5.1% year-over-year to 616.3 billion yuan ($92.4 billion) in June.

The Westpac MNI China Consumer Sentiment Indicator rose 1.5% to 118.2 in September—the highest level since May 2014—from 116.5 in August.

Leveraged loan funds saw the fifth consecutive week of outflows last week. The quantum of outflows was small and came in at $75 million last week.

The issuance of US leveraged loans fell to zero last week. However, in the previous week, ~$4.9 billion in dollar-denominated senior loans were priced.

Investor flows in high-yield bond funds were negative in the week ending December 11. Net outflows from these funds totaled approximately $3.5 billion.

Pinnacle Foods issued dollar-denominated junk bonds worth $350 million on January 12, 2016. The senior notes were rated B2/B+ and carried a coupon of 5.9%.

Investment-grade bond funds saw net inflows of $1.0 billion during the week ending April 6—compared to net inflows of $112.3 million in the week ending March 30.

The percentage of indirect bids for 4-week T-bills fell to 20.0% from 29.9% week-over-week. Indirect bidders include foreign central banks.

Investor flows in high-yield bond funds were negative last week. According to Lipper, the net outflows from high-yield bond funds totaled $0.5 billion.

The US Department of the Treasury conducts an auction for ten-year T-notes once a month. The yield on the ten-year T-notes is a benchmark in the financial markets.

An indirect and wholly owned subsidiary of Clear Channel Outdoor Holdings, Clear Channel International issued $225 million in dollar-denominated junk bonds.

Halliburton Company (HAL) issued A2/A rated high-grade bonds worth $7.5 billion in November.

The U.S. Department of the Treasury introduced two-year FRNs (floating rate notes) in January 2014. An FRN is a debt security. Its interest payment varies.

In a press conference on June 14 on its annual Article Four Staff Report, the IMF provided a positive assessment of China’s economy.

In December, China’s producer price index (or PPI) for manufactured goods fell 5.9% YoY, as manufacturers resorted to price-cutting due to weak demand.

Last week, AstraZeneca issued A2/A rated high-grade bonds worth $6.0 billion to fund the acquisition of ZS Pharma (ZSPH).

The financial sector is the largest sectoral component of all four mutual funds. So how the sector performs will have a major impact on the returns of these funds.

China’s Leading Economic Index currently indicates that the country’s economy is facing a downturn. Its LEI remained unchanged at 98.71 points in July 2015.

Hedge fund managers have expressed mixed opinions about the Chinese economy. China’s total debt-to-GDP ratio is currently in the range of 240%–270%, compared to 150% a decade ago.

Among the options for investing in high-dividend yield stocks, dividend mutual funds pay out a dividend at regular intervals to their fund holders. They hold a basket of equities that pay dividends.

China’s official Manufacturing PMI reading for November was slightly down and came at 49.6 as compared to 49.8 in October. This index is released every month.

MDC Partners (MDCA) offers marketing and communication network services. It issued dollar-denominated junk bonds worth $900 million on March 18.

Flows into investment-grade bond funds were negative for the week ended August 26, making it the fifth successive week of outflows. It was the largest outflow of 2015 so far.

High yield bond issuance surged last week and hit its highest level in 2016 yet due to continued growth in volume.

The US Treasury introduced two-year floating rate notes (or FRNs) in January 2014.

New loans issued by Chinese banks rose to 1.4 trillion yuan ($211.2 billion) up from 726.6 billion yuan ($112.0 billion) in February 2016.

Investment-grade corporate bonds worth $28.8 billion were issued in the primary market in the week to May 27, 2016.

The SSE Composite Index rose after the US Federal Reserve decided to raise the interest rate by 25 basis points. From December 9–16, 2015, the index rose 1.3% and closed at 3,516.2 points on December 16.

Last week brought the total US dollar-denominated issuance of high-yield debt to $24.3 billion in 2016 YTD. It’s 71.0% lower than the same period in 2015.

Bond prices fall when interest rate rise. So when interest rate rises, the value of a bond or a bond portfolio falls.

The US Department of the Treasury introduced two-year FRNs (floating rate notes) in January 2014. An FRN is a debt security. Its interest payment varies.

A subsidiary of MetLife, Inc. (MET), Metlife Global Funding I is a special purpose statutory trust. It issued $1.25 billion in high-grade bonds rated Aa3/AA- in two parts.

High-yield bond issuance activity was strong last week. Dollar-denominated high-yield debt amounting to $10.1 billion was issued in the week ending April 22.

Investment-grade bond issuance fell to $26.275 billion last week as compared to $32.35 billion in the previous week.

According to data from Lipper, leveraged loan funds saw outflows for the fourth consecutive week. But the quantum of outflow was tepid.

The inflows into the leveraged loan funds came in at $136.5 million during the week ending July 13—compared to an outflow of $17.5 million the previous week.

High yield bond issuance activity gained traction last week on improved Market sentiment. The total US dollar-denominated issuance of high yield debt is $60.8 billion in 2016 YTD.

The PCE price index is the Federal Reserve’s preferred measure of inflation because it covers the broadest set of goods and services.

According to data from Lipper, leveraged loan funds saw an inflow for the second consecutive week. The quantum of inflows came in at $176 million last week.

Overall, $13 billion worth of floating-rate notes were auctioned, the same as in February’s auction.

According to S&P Capital IQ Leveraged Commentary & Data, three collateralized loan obligation deals worth $1.4 billion were priced last week.

According to the People’s Bank of China, new loans issued by Chinese banks rose to 985.5 billion yuan ($150 billion) in May from 555.6 billion yuan ($85.2 billion) in the previous month.

The SSE (Shanghai Stock Exchange) Composite Index fell by 0.4% from November 12 to November 19. It ended at 3,617.06 points on November 19, 2015.

Risk-adjusted returns is a concept that can be used to determine how much return an investment can provide with the given level of risk associated with it.

China’s MNI Business Sentiment Indicator expanded to 50.5 in April due to stimulus measures from Chinese authorities to boost economic growth.

The overall demand fell for the seven-year T-notes auction because the FOMC meeting didn’t give any clarity regarding an interest rate hike in the future.

Mednax is a national medical group. It had issued junk bonds worth $750 million on December 1. Mednax would use the proceeds of the loan for refinancing.

The U.S. Department of the Treasury introduced two-year floating rate notes (or FRNs) in January 2014. An FRN is a debt security. Its interest payment varies, hence the name.

The US Department of the Treasury’s 26-week Treasury bill, or T-bill, auction, totaled $26 billion last week.

According to data from Lipper, leveraged loan funds saw outflows for the third consecutive week. The quantum of outflows came in at $73 million last week.

High-yield bond issuance activity increased significantly last week on a firm market condition. Issuers were in a rush to close deals ahead of Memorial Day weekend.

The Fidelity China Region Fund Class C (FHKCX) aims to achieve long-term capital growth.

According to Lipper fund flow data, investment-grade bond funds saw net inflows of $2.2 billion during the week ended August 17, 2016.

In February, China’s CPI (consumer price index) rose 2.5% YoY—the largest rise since July 2014. It was also higher than the 1.8% YoY rise in January.

Investment-grade bond funds have seen YTD net outflows of $1.87 billion up to January 13, 2016. High-grade bonds worth $62.47 billion—the highest in 2016 so far—were issued last week.

China’s aggregate financing also fell sharply from 3417.3 billion yuan ($525 billion) in January to 780.2 billion yuan ($120 billion) in February.

Flows into investment-grade bond funds were negative for the week ended August 21, making it the fourth successive week of outflows. The funds saw net outflows of $1.09 billion.

China’s aggregate financing dropped to 751.0 billion yuan ($115.2 billion) in April from 2.3 trillion yuan ($361 billion) in March.

Qorvo is a company involved in radio frequency systems and defense. It issued junk bonds worth $1.0 billion last week that were rated as Ba1/BB+.

The SSE Composite Index fell by 1.8% from December 2 to December 9 and closed at 3,472.44 on December 9, 2015.

High-yield bond issuance surged last week and recorded its highest level in 2016 due to improved primary market sentiment.

According to the latest SWIFT RMB Tracker, the yuan—also known as the “renminbi”—accounted for 2.3% of the global payments in November 2015.

According to Lipper fund flows data, investment-grade bond funds saw net outflows of $517.5 million in 1Q16.

We think that 2016 will be challenging for the Chinese economy. With policy support and improved credit conditions, economic activity stabilized in 1Q16.

Concordia Healthcare, a healthcare company focused on legacy pharmaceutical products and orphan drugs, issued junk bonds worth $790 million last week.

China’s official manufacturing PMI reading for December 2015 was up slightly and came in at 49.7. However, it was still in contraction mode compared to 49.6 in November.

The US Department of the Treasury introduced two-year FRNs (floating rate notes) in January 2014. An FRN is a debt security. Its interest payment varies.

Last week brought the total US dollar-denominated issuance of high-yield debt to $66.5 billion in 2016 YTD—47.0% lower than the same period in 2015.

Flows into investment-grade bond funds were negative for the week ended August 5—marking a second successive week of outflows.

Treasury yields fell across the yield curve last week after the US Department of Labor reported that the economy added fewer jobs in April.

Market demand for the four-week Treasury bills rose from 38.1% in the previous week to 41.0% last week.

With the US economy gearing itself up for the another rate hike, investors are investing in short-term Treasury securities whose price will fall less in value when interest rates rise.

For the month ending on November 30, 2015, TCWAX fell by 2.8% due to weakness in global demand and lower commodity prices.

Flows into investment-grade bond funds were positive last week. Investment-grade bond funds saw net inflows of $907.1 million during the week ending July 6.

The US Treasury conducted its weekly auction of four-week Treasury bills (or T-bills) on December 8, 2015. The issuance was $45 billion.

Leveraged loan funds saw inflows in the week ending March 9 after 32 consecutive weeks of outflows. However, the amount of inflows was small at $55.0 million last week.

Investment-grade corporate bond issuances worth $2.65 billion for the week ended November 27, 2015, and fell 92% from the previous week.

With the Brexit fallout, the Federal Reserve will most likely delay the next interest rate hike until the end of this year or even next year.

According to Lipper funds flow data, investment-grade bond funds saw net inflows of $3.1 billion—the highest inflows YTD (year-to-date)—during the week ending April 27.

Flows into investment-grade bond funds were positive for the week ending on October 14 after witnessing four consecutive weeks of outflows.

China’s service sector expanded at a moderate pace in March. The Caixin China General Services Business Activity Index beat the neutral value of 50 to come in at 51.3 in March.

Stocks from the financial sector form the biggest chunk of both funds. These stocks make up 33.9% of CHNIX, while forming 23.8% of the MCHFX.

The SSE Composite Index fell 1.0% to 2,807.51 from May 11 to May 18, 2016, after the minutes of the Federal Reserve’s April policy meeting hinted that a rate hike might happen in June.

China’s manufacturing sector has been plagued by weak demand, rising labor costs, overcapacity in industries, and tighter resource and environmental constraints.

Junk bond yields fell 18 basis points week-over-week and ended at 8.38% on March 11, 2016.