HY Market Weekly Minutes: The Jobs Report Changes Everything... Again (January 13, 2025)
A Brief Recap of Last Week's High Yield Market Performance
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Wait, 256,000 new jobs? When Wall Street’s geniuses predicted 165,000? These are the same experts who told us inflation was “transitory.” Give me a break.
Here’s what’s really happening: while everyone’s obsessed with waiting for the Fed to cut rates, the bond market just gave us all a wake-up call. The 10-year shot up to 4.76%—the highest since April. Last time I checked, that’s not what happens in a “soft landing.” Markets were betting on aggressive rate cuts in 2025, but now? Just 29bps vs. 90bps before the election.
But here’s the fascinating part—the high yield market doesn’t seem to care. CCC spreads actually tightened last week. Even more telling: the primary market roared back to life with $3.3 billion of deals in the first week of January. And get this—Clarios is out marketing a $4.5 billion dividend deal by Brookfield and CDPQ.
When companies can upsize deals and secure robust order books for shareholder-friendly transactions while Treasury yields probe multi-month highs, it tells you something important about the technical backdrop.
Let’s dive in and see what’s really going on.
Jobs in Credit:
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