Midday Commentary: Investment-grade bonds widen in early trade; JPMorgan Chase paper eases

By Cristal Cody

Tupelo, Miss., Jan. 24 - Investment-grade bond spreads stayed wider early Friday in sympathy with the weakness in stocks, according to a market source.

The Markit CDX North American Investment Grade series 21 index eased 2 basis points to a spread of 68 bps on Thursday.

Financial paper so far this year has outpaced industrial bonds, according to Barclays on Friday.

"Only a few weeks into 2014, the corporate credit markets are continuing the trends that were in place for much of last year," Barclays analysts said in a note. "The U.S. Corporate Index has sustained its momentum, with OAS [option-adjusted spread] already about 2.5 [bps] tighter. Within the index, financials have tightened 4 [bps], again outpacing industrials, which have tightened less than 2 [bps]."

Financial paper traded mostly weaker Friday morning, a market source said.

JPMorgan Chase & Co.'s 4.85% senior notes due 2044 sold earlier in the week eased 2 bps from the previous day, a source said.

JPMorgan eases

JPMorgan's 4.85% notes due 2044 (A3/A/A+) traded early Friday at 120 bps offered, 2 bps wider than seen on Thursday, a market source said.

JPMorgan sold $1 billion of the long bonds at Treasuries plus 112.5 bps on Tuesday.

The financial services company is based in New York City.

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