The high and equity selloff picked up through the first half of the week and then quickly reversed Thursday and Friday, leaving both markets positive on the week. These moves were on the back of oil hitting a 12-year low on Wednesday, only to bounce back quickly from the sub-$27 price low up to close Friday at $32.50. The yield to worst on the Bank of America High-Yield Index (BAML) was unchanged and the spread tightened 2bps over the past week to close at 9.43% and +787bps, respectively, after hitting multi-year highs for both earlier in the week. After a slightly positive return this week, the year-to-date return on the BAML HY index is down 2.28%, still outperforming equities by a large margin with the Dow and S&P 500 Index down 7.5% and 6.6%, respectively.

High-yield exchange traded and mutual fund flows remained negative at another -$2.0 billion for the week ending January 20^th, the sixth redemption in the last seven weeks, for a total outflow of $13.4b over that period. The new issue market came a bit more to life this week with $1.3bil pricing over two tranches. Even at just two deals pricing, this was the most active week so far this year.

The Bank of America Merrill Lynch High Yield Index monitors the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market.  Index data sourced from Bloomberg. BAML HY represents the index yield for the designated date, while return/change represent the index return for the period ending date. Yield referenced is the yield-to-worst and spread referenced is the spread-to-worst.