The high-yield market was resilient this week, shrugging off volatile oil, wavering equity markets and large outflows from retail exchange traded and mutual funds as Fed rate hike concerns faded amid weaker than expected US economic data. The yield to worst and spread on the Bank of America High-Yield Index (BAML) widened 16bps/17bps over the week to close at 6.37%/+504ps, respectively. Most of the weakness came at the start of the week, before rallying into the weekend on hopes that the Fed will stay the course, and other central banks will ease in upcoming meetings. WTI closed Friday at $43.03, down 6.2% from last Friday’s close.

The recent issuance onslaught continued this week with 12 deals for just under $10 billion in proceeds pricing. When combined with last weeks $9.51 billion in new issue proceeds, it was the biggest two week total since June and marked the first time this year that more than $9 billion priced in two consecutive weeks. Most of this week’s issues priced at the tight end of talk, or tighter than initial talk, as many of them were 4x-5x oversubscribed. US high-yield retail mutual and exchange traded funds reported an outflow totaling $2.45 billion for the week ended September 14th, the second largest outflow of 2016 falling just short of the outflow for the week ended August 3^rd of $2.46 billion. Passive ETF’s made up about 85% of this week’s outflow as fast money looked to exit the asset class as concern over a potential Fed rate hike reemerged late last week. The year-to-date total inflow is now $7.53 billion after the most recent outflow.

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.