High Yield Morning Update

U.S. equity futures were higher this morning on the larger than expected Spanish bank package announced over the weekend, but as the trading day got underway in the U.S. markets turned negative as skittishness over the end game in Europe and continuing fear over the slowing global economy came back to the forefront. The high yield market had a firm tone on Friday to end the week, opened better today on equity enthusiasm spill-over, but has also started to weaken along with equities as the trading day wears on. After briefly trading through 8% on the Bank of America High Yield index last week, we quickly tightened back in to a yield of 7.89% on Friday, with money flowing back in to the high yield asset class on Thursday and Friday.* Volatility doesn’t seem to be going anyway any time soon, but with yields near 8% on the index, the we believe high yield market should be bought.

* Data sourced from Bloomberg