Morning Commentary: Junk tracks lower on inflationary employment and GDP data

By Paul A. Harris

Portland, Ore., Dec. 22 – The high-yield bond market opened ½ point lower on Thursday, with stock indexes in the United States undergoing significant declines, a sellside source said.

Data indicating that inflation is far from tamed – inviting speculation that the Fed might address interest rates in the new year with renewed vigor – sent the markets lower at mid-morning.

The U.S. Labor Department reported 216,000 jobless claims in the most recent week, versus economists' estimates of 225,000.

The Commerce Department, meanwhile, reported third-quarter GDP growth of 3.2%, up from 2.9% in the second quarter.

With the S&P 500 stock index down 1.8% at mid-morning, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was down 0.31%, or 24 cents, at $74.43.

As high-yield market activity continues to diminish with the approach of Christmas and the holiday week ahead, the new issue market remained quiet on Thursday and is not expected to reactivate before the end of the year, sources say.

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