Corporate bonds calm after recent spurt of activity

Yields on bonds edged higher set against the backdrop of a rally in the stock market and some Treasury market weakness. A trade deficit report characterized sliding output in Japan but provided hope that both exports and imports might rebound during the current quarter.

Click on link for updated table throughout the day at http://www.interactivebrokers.com/en/p.php?f=daily_analysis.

Investment Grade -

Johnson & Johnson (JNJ) – The healthcare manufacturer’s longer-dated 26-year paper maturity was well bid Thursday with its price advancing almost $3 at one point as investors swooped on $40mm of J&J paper. The August 2037 issue traded up to 116.92 sending its yield lower to 4.80% even as longer-dated government paper edged off the strong rally ahead of a large 30-year auction later on Thursday.

Non-Investment Grade –

Ford Motor Co. (F) – Ford’s seven-year paper was sold by investors Thursday sending the yield on the May 2018 issue higher to 5.29%. Ford’s 5% coupon-carrying May 2018 maturity is Ba2-rated and traded lower on volume of $8mm on Thursday.

Andrew Wilkinson is a Senior Market Analyst at Interactive Brokers LLC

Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

About the Author
Andrew Wilkinson

Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.

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