U.S. equities are pointing to a positive open

Posted: Friday, July 12, 2019 - 09:30 EDT

U.S. equities are pointing to a positive open as the prospect of lower interest rates continues to help equities. Asian equities were generally higher as economic data came in line overnight. European indices are also positive, although Daimler issued another profit warning. China Q2 GDP comes out on Sunday. Nevertheless, the positive tone to credit/risk continues to be driven by the direction of rates. 

There was some good two-way flow in midstream bonds and financials yesterday, with spreads tightening by 1-2bps only to finish the day unchanged. Firms continue to refresh shelf filings which leads us to believe that once rates go a bit lower we may see some issuance. We suspect trades will trade range bound throughout the summer, but with a bias to go tighter barring any exogenous event.

Equity Markets:

  Index Level % Change QTD YTD Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
S&P 500 2,999.91 0.23% 2.05% 20.97% -0.76% 3.43%

7.71%

-13.52% 13.65% 4.30%
TSX

16,527.90

-0.21%

0.95%

17.33%

-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 1.62% 0.04%

0.16%

-0.34% 2.09% 2.17% 2.43% 1.97% 1.62% 1.47%
Canada 30 Year 1.80% 0.05% 0.12% -0.38% 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

3.20%

0.05% 0.12% 0.12% 3.47% 3.49% 3.72% 3.68% 3.39% 3.09%
US 10 Year 2.13% -0.01% 0.13% -0.55% 2.74% 2.86% 3.06% 2.69% 2.41% 2.01%
CDX IG 53.235 -0.186                

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.