JPM High-Yield and Leveraged Loan Morning Intelligence

Research evidence excerpt

JPM High-Yield and Leveraged Loan Morning Intelligence

inside the 876bp market-weighted index spread. Additionally, 46% of CCCs trade below 500bp whereas

23% trade above 1000bp.

--Overnight Price Action: S&P Futures are rallying 1% overnight with Brent tumbling $8 to $89 amid

easing Middle East tensions as US paused strikes against Iran over the weekend (link). Meanwhile, 10yr

Treasury yields are down 4bp overnight ahead of Durable Goods at 8:30am and earnings. This is a heavy

macro week that includes seven central bank meetings headlined by Wednesday’s Fed rate decision,

followed by a BoE on Thursday and the BoJ on Friday. Besides Wednesday’s Fed meeting, this week also

brings the heaviest week of earnings (35% of S&P500 set to report), a 2Q GDP report on Thursday (JPM

estimates 2%) along with a round of June activity data that includes Tuesday’s consumer confidence and

trade data, Thursday’s PCE report, and Friday’s ECI Index and consumer sentiment. With regards to

Wednesday’s Fed meeting, our economists expect at least two dissents for a hike, but think the soft June

CPI creates a comfortable majority that prefers to stay on hold and wait to see more data ahead of the

September meeting (US: FOMC preview). And with no new dot plot or economic forecasts scheduled to be

released, investors will focus on changes to the statement and information on who dissents. Markets

currently price in a one in three chance the Fed delivers a hike on Wednesday. Elsewhere, our Chase card

data points to a 0.3%m/m drop in control retail sales, with some of this reflecting Amazon moving their

Prime Days sale into June this year. Meanwhile, Friday’s flash PMIs re-affirmed the message from the

regional Fed surveys that growth is holding up fine and has been robust on both the manufacturing