Halyard’s Weekly Wrap
our thoughts on the past week’s market activity, economic releases, and Federal Reserve commentary
10/03/25 – US economy slows further as companies and consumers navigate headwinds.
This week, the US bond market saw Treasury yields fall, especially at the shorter end, as investors once again priced in two additional rates cuts by year end. The 10-year yield held its weekly decline amid a slowdown in economic indicators, with private payrolls dropping and services activity stalling. Robust demand for investment grade credit continued with spreads a touch tighter on the week. There have been notable red flags appearing in the high yield and asset back lending space over that past few weeks that investment grade investors are ignoring. Notably, First Brands bankruptcy – a high yield company with significant use of off-balance sheet trade financing and the Tricolor collapse – auto financing focusing on sub prime lending. Are these one-off credit issues or are they indicative of a broader credit cycle immerging within the capital markets?
Economic data released over the past week included better than expected personal spending and income levels, as well as inline PCE prices indices – Core PCE inflation was stable at 2.9% year over year. Consumer confidence and business surveys, however, broadly pointed to a further slowing in economic activity. Job data continue to point to a no fire / no hire equilibrium. The standout in Halyard’s opinion was the uptick in annualized auto sales to 16.39 million units compared to 16.07 million in the previous month. While down from the 17.7-million-unit sales in the 1st quarter of 2025, auto sales are up 4.6% year over year on a 3-month rolling average basis.
As equally sanguine as credit investors, Equity investors shrugged off the US Federal government shutdown and continued to buy – the S&P 500 is trading at yet another record level of $6,725 Friday afternoon. The release of labor statistics – usually one of the more volatile days for bond yields was delayed due to the congressional impasse on funding. Perhaps we get a release next week!
This commentary is being provided by Halyard Asset Management, L.L.C. and its affiliates (collectively “Halyard” or “we”) for informational and discussion purposes only and does not constitute, and should not be construed as, investment advice, or a recommendation with respect to the securities used, or an offer or solicitation, and is not the basis for any contract to purchase or sell any security, or other instrument, or for Halyard to enter into or arrange any type of transaction as a consequence of any information contained herein. Although the information herein has been obtained from public and private sources and data that we believe to be reliable, we make no representation as its accuracy or completeness. The views expressed herein represent the opinions of Halyard Asset Management, LLC, or any of its affiliates, and are not intended as a forecast or guarantee of future results. Past performance is not indicative of future results.
Contact Us
Location
399 Knollwood Road
Suite 107B
White Plains, NY 10603
Halyard’s Weekly Wrap – 6/21/24
/in Weekly Wrap/by halyardA mid-week U.S. holiday, summer vacations, and noisy economic data all led to mostly unchanged bond and stock markets this week. For the week, the 2-year/30-year yield curve was 2.5 basis points less inverted, closing the week at -33.5 basis points, with the entire move coming from a marginal drop in the yield-to-maturity of the 30-year bond. The S&P 500 briefly traded into record territory but is closing the week about 1% off of the 5,505.53 record touched on Thursday.
Halyard’s Weekly Wrap – 6/14/24
/in Weekly Wrap/by halyardThe consumer price index (CPI) for May was released Wednesday, the morning of the FOMC meeting. The one-month change to the index was 0.0% and the headline year-over-year index rose 3.3%, a 0.1% improvement over last month’s reading. Investors interpreted the change as a big step in the right direction and rallied stocks and bonds, pushing the yield curve down to recent lows and the S&P 500 to a fresh all-time high.
Halyard’s Weekly Wrap – 6/7/24
/in Weekly Wrap/by halyardThe investment community, lately, had bought into the narrative that the economy is slowing, and that the Fed was about to reengage in the rate cut conversation. The May employment report, released this morning, fully took the air out of that notion. After April’s report came in below expectation, economists were expecting the number of new jobs created for the month would total 180,000, with the low estimate at 120,000 and the high at 259,000. The actual number blew past those forecasts with 272,000 new jobs created in the month. The report was a little messy in that the household report showed a contraction of -408,000 jobs and the labor force shrunk by -250,000 workers causing the unemployment rate to tick up to 4.0%. We advise to look past that uptick due to a few nuances between the household and the establishment survey. The bottom line is the June jobs report changes the soft-landing narrative and further postpones the likelihood of a rate cut anytime soon.
Halyard’s Weekly Wrap – 5/24/24
/in Weekly Wrap/by halyardThe release of the May 1st FOMC minutes was as expected, with the members concurring that the rate of inflation is stubbornly stuck at levels above which they are comfortable. The second sentence of the minutes read “Domestic data releases over the intermeeting period pointed to inflation being more persistent than previously expected and to a generally resilient economy,” That’s pretty much says it all. The economy continues to hum along despite the FOMC’s tightening of monetary policy. A Few economists continue to rumble that the Fed will need to again hike the overnight rate but that’s far from consensus.
Halyard’s Weekly Wrap – 5/17/24
/in Weekly Wrap/by halyardThe April consumer price index and the various subcomponents came in as expected offering relief to investors fearful of an upside surprise. The year-over-year headline measure showed that inflation cooled to 3.4% from the 3.5% reported in March. The change in direction was welcome news to the capital markets but the incremental improvement is hardly enough for the Fed to claim victory. There’s an old saying in the capital market “that one number does not make a trend” and that clearly applies to last month’s CPI. We’ll be watching the index through the summer to identify any potential trend.
Halyard’s Weekly Wrap – 5/10/24
/in Weekly Wrap/by halyardAfter last week’s repricing of the yield curve to again reflect the possibility of one rate cut this year, the interest market barely moved this week. The dearth of economic data allowed the 2-year/30-year yield curve to remain at a 20-basis point inversion with the 2-year notes closing the week modestly higher at 4.86%. That was good news for the equity market as the S&P 500 continued to rally and now stands less than 1% away from its all-time high as earnings releases dwindle to a trickle.