Morning Commentary: High-grade supply quiets amid earnings reports; secondary active

By Cristal Cody

Tupelo, Miss., July 17 – The investment-grade primary market stayed quiet at the start of Wednesday's session with no reported issuers marketing bonds.

Market focus remains on the slew of second-quarter earnings reports being released this week.

On Wednesday, companies including Abbott Laboratories, Bank of America Corp., Bank of New York Mellon Corp., eBay Inc., International Business Machines Corp. and U.S. Bancorp release earnings results.

Possible bank and financial issuance is anticipated by market sources following the release of earnings reports this week from Goldman Sachs Group Inc., JPMorgan Chase & Co. and Wells Fargo & Co. on Tuesday and Citigroup Inc. on Monday. Morgan Stanley will report its earnings on Thursday.

Week to date, high-grade corporate issuers have priced more than $7 billion of bonds.

Deal volume slowed on Tuesday with just one registered corporate issuer in the primary market.

Westpac Banking Corp. priced $2.25 billion of subordinated notes in two tranches after holding fixed income investor calls on Monday.

In addition, the Inter-American Development Bank priced an upsized $2.5 billion two-part offering of global notes.

High-grade issuers sold more than $5 billion of securities on Monday.

About $25 billion to $30 billion of supply was forecast by market sources for the week.

While primary action slowed on Tuesday, secondary market volume rose to $20 billion from $14.88 billion on Monday, according to Trace.

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