U.S. equity futures are pointing to a negative open

Posted: Tuesday, July 9, 2019 - 09:41 EDT

U.S. equity futures are pointing to a negative open after a mixed overnight session.  Asia was lower and Europe was also lower after BASF (German Chemical company) cut its forecast guidance yesterday.  The U.S. also announced fresh tariffs on some Mexican and Chinese steel goods.  Canadian credit continues to grind tighter driven by lack of supply. 

The new issuance calendar so far continues to look light in Canada as we enter the summer doldrums. Royal Bank is offering a U.S.$ 5yr benchmark size deal with the initial price talk being around 10bps tighter than the Canadian dollar issue.  BMO is as well offering a Aussie bail-inable deal this morning.  This continues to justify the tightening of Canadian credit spreads, and we’re seeing better buying in higher yielding securities such as TRPCN hybrids, TCN, and IPLCN, within the 5-10yr space. 

Equity Markets:

  Index Level % Change QTD YTD Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
S&P 500 2,975.95 -0.48% 1.20% 19.97% -0.76% 3.43%

7.71%

-13.52% 13.65% 4.30%
TSX

16,462.95

-0.48%

0.49%

16.80%

-4.52% 6.77%

-0.56%

-10.11% 13.29%

2.58%

Rates:

 

Today

% Change

QTD change

YTD change

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

Q2 2019

Canada 5 Year

1.57%

0.03% 0.17% -0.32% 1.97% 2.07% 2.34% 1.89% 1.52% 1.39%
Canada 10 Year 1.58% 0.00%

0.11%

-0.39% 2.09% 2.17% 2.43% 1.97% 1.62% 1.47%
Canada 30 Year 1.73% -0.02% 0.04% -0.46% 2.23% 2.21% 2.42% 2.18% 1.89% 1.69%
30yr Generic Corporate A rated Spread 1.40% 0.00% 0.00% 0.00% 1.24% 1.28% 1.30% 1.50% 1.50% 1.40%
30yr All-in Corporate A rated Yield

3.13%

-0.02% 0.04% 0.04% 3.47% 3.49% 3.72% 3.68% 3.39% 3.09%
US 10 Year 2.05% 0.01% 0.05% -0.63% 2.74% 2.86% 3.06% 2.69% 2.41% 2.01%
CDX IG 54.937 0.231                

The information contained herein is intended for advisors for general information only and is compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made as to its accuracy. All opinions contained in the commentary and expressed by the portfolio manager are subject to change without notice and are provided in good faith without legal responsibility. All market data is sourced from Bloomberg.