Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Corporate Bond Rally Picks Up Momentum -- Update

05/22/2020 | 05:25pm EDT

By Sam Goldfarb

U.S. corporate bonds wrapped up another strong week on Friday, reflecting investors' hopes for an economic rebound and support from the Federal Reserve.

As of Thursday, the average extra yield, or spread, investors demand to hold speculative-grade corporate bonds over U.S. Treasurys was 6.81 percentage points, according to Bloomberg Barclays data. That was down 0.76 percentage point from the previous Friday -- on track for the biggest weekly decline since the week ended April 17.

The average spread on investment-grade corporate bonds also was down the most since that week, having tightened 0.23 percentage point to 1.85 percentage points.

Various market gauges on Friday suggested relatively little change to those levels.

Blackrock's iShares U.S. high-yield corporate-bond exchange-traded fund ticked up 0.3%, while its investment-grade ETF was flat. Moves among newly issued bonds also were mostly muted. AT&T Inc.'s new 2.75% 2031 notes traded in the afternoon with a spread of 2.05 percentage points, having been issued Thursday at a spread of 2.1 percentage points, according to MarketAxess.

The yield on the benchmark 10-year U.S. Treasury note settled at 0.659%, according to Tradeweb, compared with 0.677% Thursday. Yields fall when bond prices rise.

Actions taken by the Fed have played a major role in lifting corporate bonds, many investors and analysts say. Data released by the central bank late Thursday indicated it bought around $1.5 billion of corporate-bond ETFs in the week ended Wednesday. That brought its total holdings to $1.8 billion after it started buying the securities early last week.

Perhaps inspired by the Fed, individual Investors also have been pouring money into bond funds. Net inflows into high-yield funds totaled $1.6 billion in the week ended Wednesday, bringing the three-week total to nearly $10 billion, according to Refinitiv Lipper.

Some of the momentum in the corporate-bond market has been self perpetuating, said Bill Zox, a portfolio manager at Diamond Hill Capital Management.

"If you're insuring too much against the massive amount of uncertainty ahead of us, you're just falling farther and farther behind in this rally," he said.

Write to Sam Goldfarb at sam.goldfarb@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
CHANGE INC. -0.82% 3030 End-of-day quote.-14.04%
LETS HOLDINGS GROUP CO., LTD. -1.79% 7.12 End-of-day quote.-8.48%
LOOK HOLDINGS INCORPORATED -3.23% 1497 End-of-day quote.56.43%
Latest news "Economy & Forex"
06/18Australia takes wine dispute with China to WTO
RE
06/18EUROPEAN UNIONá : Council adopts recommendations on the updated stability and convergence programmes
PU
06/18UNECA UNITED NATIONS ECONOMIC COMMISSION FOR AFRá : Embedding and financing climate resilience underpins Africa's recovery
PU
06/18Australia takes wine dispute with China to WTO
RE
06/18CENTRAL PEOPLE GOVERNMENT OF PEOPLE REá : Seven decades on, Tibet ecology a success story
PU
06/18CENTRAL BANK OF PHILIPPINESá : BSP Establishes Guidelines on Open Finance Framework
PU
06/18Guyana Education Sector Program Project
PU
06/18China reports 30 new COVID-19 cases versus 23 the day before
RE
06/18ROOS : Leadership of nagayama during his tenure as board chair at critical moment for sony cannot be overstated
RE
06/18ROOS : Convinced toshiba's shareholders will benefit from him continuing to provide his steady hand and strong leadership
RE
Latest news "Economy & Forex"