More From Lynn Noah
US Stock Indices Plunge after Oil Prices Rebound
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.
3-Year Treasury Notes’ Overall Demand Fell on July 7
The US Treasury holds monthly auctions of three-year Treasury notes. The latest auction was held on July 7.
10-Year Treasury Note Market Demand Barely Moved Last Week
On July 8, ten-year Treasury notes worth $21 billion were auctioned—the same as the previous week.
High-Grade Bond Yields Rose as Spreads Touched Their Lowest Level
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.
Leveraged Loans Primary Market Issuance Falls to Zero after Christmas Weekend
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.
Outflows in High-Yield Funds Fell, Yield on High-Yield Bonds Rose
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.
Clear Channel International: The Only Junk Bond Issuer in the Week Ending December 11
An indirect and wholly owned subsidiary of Clear Channel Outdoor Holdings, Clear Channel International issued $225 million in dollar-denominated junk bonds.
IMF Provides a Positive Assessment of China’s Economy
In a press conference on June 14 on its annual Article Four Staff Report, the IMF provided a positive assessment of China’s economy.
AstraZeneca Issued High-Grade Bonds to Acquire ZS Pharma
Last week, AstraZeneca issued A2/A rated high-grade bonds worth $6.0 billion to fund the acquisition of ZS Pharma (ZSPH).
Impact of the Slowdown in China’s Retail and Financial Sectors
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.
Analyzing China’s Leading Economic Index
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.
What Do Hedge Fund Managers Have to Say about China?
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.
MDC Partners Issued the Most Junk Bonds in the Week to March 18
MDC Partners (MDCA) offers marketing and communication network services. It issued dollar-denominated junk bonds worth $900 million on March 18.
Investment-Grade Bond Funds Witness Largest Outflow of 2015
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 Hit 2016 Record Last Week
High yield bond issuance surged last week and hit its highest level in 2016 yet due to continued growth in volume.
Why the Bid-to-Cover Ratio Rose for 2-Year Floating Rate Notes Auction
The US Treasury introduced two-year floating rate notes (or FRNs) in January 2014.
Investment-Grade Corporate Bonds’ Issuance Fell Last Week
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’s Performance since the Fed Rate Hike
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.
High-Yield Bond Issuance Fell after the FOMC’s Dovish Statement
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.
Choosing between Short- and Long-Term Fixed-Income Mutual Funds
Bond prices fall when interest rate rise. So when interest rate rises, the value of a bond or a bond portfolio falls.
Investment-Grade Bond Funds Saw Outflows for Third Week in a Row
Investment-grade bond issuance fell to $26.275 billion last week as compared to $32.35 billion in the previous week.
Why High Yield Bond Market Issuance Gained Traction Last 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.
What Do the PCE Price Index and Break-Even Inflation Indicate?
The PCE price index is the Federal Reserve’s preferred measure of inflation because it covers the broadest set of goods and services.
Leveraged Loan Funds Witness Back-to-Back Inflows
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.
Why Overall Demand Tanked for 2-Year Floating-Rate Notes
Overall, $13 billion worth of floating-rate notes were auctioned, the same as in February’s auction.
Why Leveraged Loan Funds Saw Outflows Last Week
According to S&P Capital IQ Leveraged Commentary & Data, three collateralized loan obligation deals worth $1.4 billion were priced last week.
China’s New Yuan Loans Rose in May, but Its Debt Pile Increased
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.
Analyzing Risk-Adjusted Returns of Four China-Focused Mutual Funds
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 Expanded in April, Caution Prevails
China’s MNI Business Sentiment Indicator expanded to 50.5 in April due to stimulus measures from Chinese authorities to boost economic growth.
T-Notes Auction: Poor Demand amid the FOMC Meeting
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.
How Did US Treasury Auctions Fare Last Week?
The US Department of the Treasury’s 26-week Treasury bill, or T-bill, auction, totaled $26 billion last week.
Leveraged Loan Funds Witnessed a Small Outflow 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 Market Issuance Was Highest Year-to-Date
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.
How Did the Fidelity China Region Fund Class C Perform in August?
The Fidelity China Region Fund Class C (FHKCX) aims to achieve long-term capital growth.
Why China’s CPI Data Were Stronger in February
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.
China’s New Yuan Loans, Aggregate Financing Dropped in February
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.
Investment-Grade Bond Funds See Outflows for 4 Consecutive Weeks
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 New Yuan Loans and Aggregate Financing Plummeted in April
China’s aggregate financing dropped to 751.0 billion yuan ($115.2 billion) in April from 2.3 trillion yuan ($361 billion) in March.
SSE Composite Index Falls despite China’s New IPO System
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 Recorded Is the Highest in 2016 YTD
High-yield bond issuance surged last week and recorded its highest level in 2016 due to improved primary market sentiment.
China’s Yuan Share Rose in Global Currency Payments
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.
Investment-Grade Bond Funds Witnessed Outflows in 1Q16
According to Lipper fund flows data, investment-grade bond funds saw net outflows of $517.5 million in 1Q16.
Key for Investors: 5 Issues Are Choking Real Growth in China
We think that 2016 will be challenging for the Chinese economy. With policy support and improved credit conditions, economic activity stabilized in 1Q16.
High Discount Margin: Highest Ever for 2-Year Floating Rate Notes
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.
Why Was High-Yield Bond Issuance Slow Last Week?
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.
Why Did US Stock Indices Rise?
Treasury yields fell across the yield curve last week after the US Department of Labor reported that the economy added fewer jobs in April.
Is the US Economy Ready for Another Rate Hike?
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.
TCWAX Fell Due to Weak Global Demand
For the month ending on November 30, 2015, TCWAX fell by 2.8% due to weakness in global demand and lower commodity prices.
Investment-Grade Bond Funds Saw Inflows Last Week
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.
Did Leveraged Loan Funds Break a 32-Week Streak of Outflows?
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.
After the Fallout from Brexit, the Fed’s Hands Are Tied Again
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.
Investment-Grade Bond Funds Witness Inflows
Flows into investment-grade bond funds were positive for the week ending on October 14 after witnessing four consecutive weeks of outflows.
How Did China’s Service Sector Fare in March?
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.
What Are the Portfolio Compositions of CHNIX and MCHFX?
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.
SSE Composite Index Falls on Worries of a US Interest Rate Hike
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.
Are There Opportunities amid China’s Manufacturing Slump?
China’s manufacturing sector has been plagued by weak demand, rising labor costs, overcapacity in industries, and tighter resource and environmental constraints.
Investment-Grade Bond Funds Continue to Witness Outflows
According to Lipper Fund Flow data, investment-grade bond funds saw net outflows of $1.2 billion during the week ended January 27, 2016.
Why Leveraged Loan Funds Witnessed an Outflow Last Week
According to data from Lipper, leveraged loan funds saw an outflow for the fourth consecutive week. The quantum of outflows was $93 million last week.
Leveraged Loan Issuance Was Almost Stable Last Week
The US leveraged loans market saw an allocation of $4.75 billion worth of dollar-denominated senior loans in the week to April 29.
Investment-Grade Bond Funds Saw Outflows in November
According to Lipper’s funds flow data, investment-grade bond funds saw net outflows of $789.1 million up to the week ending November 25.
TCWAX: 2015’s Worst Performer, but Lowest YTD Negative Return
The Templeton China World Fund – Class A (TCWAX) is the third-largest fund under this review, with an asset size of $297.2 million as of January 2016.
Why Are Mark Yusko and Mark Mobius Bullish on China?
Mark Yusko has been bullish on China for a long time. He thinks that although China’s GDP declined, it’s still at a much higher level than other countries.
Demand Nose-Dived for Two-Year Floating Rate Notes Auction
Market demand for two-year floating rate notes in September fell sharply to 24.7% of the accepted competitive bids—its lowest mark ever—compared to 43.6% at August’s auction.
Inflows Continued into High-Yield Bond Funds, Yields Fell Sharply
Investor flows into high-yield bond funds were positive for the fifth week. Net inflows into high-yield bond funds totaled $1.7 billion in the week ending March 16.
High-Yield Bond Funds Witnessed Large Outflows
Investor flows into high-yield bond funds were negative last week. According to Lipper, net outflows from high-yield bond funds totaled $1.8 billion.
Investment-Grade Bond Funds Witnessed Inflows
The flows into investment-grade bond funds were positive for the week ending November 18. Investment-grade bond funds saw net inflows of $945.0 million.
China’s New Yuan Loans and Aggregate Financing Rise in November
The rise in new yuan loans doesn’t directly impact the overall performance of mutual funds. But with the rise in credit flow in the economy, mutual funds with large exposures to financials benefit.
Investment-Grade Bond Funds Saw Outflows in Week Ended November 25
For the week ended November 25, investment-grade bond funds saw net outflows of $1.46 billion after witnessing two consecutive weeks of inflows.
Leveraged Loan Funds See More Outflows
Leveraged loan funds saw an outflow for the week ending November 25. The quantum of outflows was $742.0 million last week—up from $306.2 million in the previous week.
Macro Factors to Look for When Investing in China
China’s shifting its focus from a manufacturing-based economy to a consumer-based economy. It’s expected to do well in the long run.
Hanesbrands Issued the Most Junk Bonds in the Week to May 6
Hanesbrands issued Ba2/BB rated dollar-denominated junk bonds worth $1.8 billion on May 3. It will use the proceeds of the loan for refinancing purposes.
High Yield Bond Issuance Fell in December on Rate Hike, Holidays
Let’s look at the high yield bond markets. Junk bond issuers stayed away from the primary market for three successive weeks in December due to holidays.
Leveraged Loan Funds Continue to Witness Inflows
According to data from Lipper, leveraged loan funds saw an inflow for the third consecutive week. The inflows came totaled $126 million last week.
Walgreens Boots Alliance Issued the Most High-Grade Bonds
Walgreens Boots Alliance (WBA) issued Baa2/BBB rated high-grade bonds worth $6.0 billion through five parts on May 26.
Intelsat Jackson Issued Most Junk Bonds in the Week Ended March 24
Continuous improvement in market conditions resulted in the highest year-to-date (or YTD) high-yield bond issuance in the primary market last week.
Why Leveraged Loan Funds Saw Outflows after 3 Weeks of Inflows
Collateralized loan obligation (or CLO) deals worth $451 million were priced last week. Year-to-date CLO issuance stands at $7.1 billion.
Why Did High-Yield Bond Issuers Avoid the Primary Market?
High-yield bond issuance fell to zero last week due to two main reasons. Junk bond issuers stayed away from the primary market due to fears of default risk.
What Happened at the US Treasury Auctions in the Week Ending June 10?
It’s expected that the Fed may increase the interest rate soon, and 30-year Treasury bonds auction are closely watched by stock and bond investors.
Leveraged Loan Funds Witnessed Outflows: What Does It Mean?
Leveraged loan funds saw an outflow in the week ending February 3. It’s the fifth successive week in 2016. The quantum of outflows was $405.0 million last week.
Brexit Vote: How Did US Treasury Auctions React?
The US Treasury auctioned 30-year TIPS (VIPSX)(LTPZ) worth $5 billion on June 22.
What Are the Portfolio Compositions of FHKCX and JCOAX?
The Fidelity China Region Fund Class C (FHKCX) and the John Hancock Greater China Opportunities Fund Class A (JCOAX) benchmark their performance to the MSCI Golden Dragon Index.
US Stock Indexes Rally with Japan’s Stimulus and Robust Jobs Data
The three US stock indexes that we review in this weekly series rose from July 5–12, 2016. Robust US jobs data boosted investor sentiment and eased the fear of an economic slowdown.
Prime Security Services Issued the Most Junk Bonds Last Week
Prime Security Services is a subsidiary of Apollo Global Management (APO). It issued junk bonds worth $3.14 billion on April 20.
August 2015’s Top High-Grade Bond Issuers
US corporates were the highest issuers of high-grade bonds in August 2015, making up 35.4% of all issues. Yankee bond issuers came in second.
Why Yankee Bank Issuers Find US Corporate Debt Attractive
A lower cost of borrowing and tighter spreads have attracted foreign banks to flock to the US corporate debt market.
Visa Inc Led the High-Grade Bond Market Last Week
Visa Inc (V) issued A1/A+ rated high-grade bonds worth $16.0 billion via six parts. This included $1.75 billion in 1.20% two-year notes at a spread of 30 bps.
Did China End Its 4-Month Decline in Foreign Reserves in March?
China’s State Administration of Foreign Exchange, or SAFE, released foreign reserve data for March on April 7, 2016. China’s foreign reserves rose $10.3 billion to $3.2 trillion in March.
US Stock Indexes Almost Flat after Release of FOMC Minutes
The three US equity stock indexes we review in this weekly series were mostly flat from August 11–18, 2016. This came after the minutes from the July 26–27 FOMC meeting.
The Caixin China Services and Composite PMI in October
The Caixin Composite Output Index stood at 49.9 in October—slightly below the neutral 50.0 value—up from 48.0 in September.
High-Yield Bond Issuance Rose Last Week
The total US dollar-denominated issuance of high-yield debt stands at $56.9 billion YTD in 2016—29% lower compared to the same period in 2015.
China’s Efforts to Boost Its Slowing Economy in 3Q15
In an attempt to prop up its slowing economy, on October 23, the PBoC cut its one-year benchmark bank lending rate by 25 basis points to 4.35%.
US Stock Indices Remain Mixed as Oil Prices Fell during the Last Week of 2015
Among the US stock indices we review in this weekly series, two US equity indices rose while one equity index fell between December 23 to December 30, 2015.
US Stock Indexes Fell as Oil Prices Touched New Lows
Three US equity indexes—the S&P 500, the Dow Jones Industrial Average, and the NASDAQ—fell from January 12 to January 19 as the oil price rout continued.
5-Year TIPS Were Auctioned at a Negative Yield Again
The US Treasury auctioned five-year TIPS worth $14 billion on August 18. The overall demand for the securities fell 2.1% from the previous auction.
Leveraged Loan Funds Saw Back-to-Back Inflows Last Week
According to Lipper, in the week ended August 10, 2016, leveraged loan funds saw inflows of $96.4 million. In the previous week, inflows were $60.4 million.
Investment-Grade Bond Fund Flows Rose Slightly Last Week
According to Lipper funds flow data, investment-grade bond funds saw net inflows of $2.52 billion during the week ending August 10.
Why China Approved the Shenzhen-Hong Kong Stock Exchange Link
China’s State Council approved the long-awaited Shenzhen-Hong Kong Stock Exchange Link on August 16, 2016. The Shenzhen Composite Index gained 3.2% from August 12 to August 16.
Westpac Banking Issued the Most High-Grade Bonds Last Week
Westpac Banking Corporation (WBK) issued Aa2/AA- rated high-grade bonds worth $5.0 billion via five parts on August 11, 2016.
SSE Composite Index Rose, Chinese Government Bond Yields Fell
The SSE Composite Index rose by 1.4% to 3,002.64 from August 3 to August 10. The Chinese government bond yield fell after the decline in global bond yields.
Leveraged Loan Funds Had Small Inflows Last Week
In the week ended August 3, 2016, leveraged loan funds saw inflows worth $60.4 million. In the previous week, leveraged loan funds had outflows of $15 million.