The Big Bad Bond Index (BBBI), which tracks high grade corporate bonds, slightly rose closing at 1,152.70. This means the average bond in the index was trading at $1,152.70 based on the last trade of the day. Twenty one bonds ended higher and eight lower. The average yield fell 0.2% to 2.28%.
The biggest gainer on the day was Boeing’s (BA) 4.875% coupon bond maturing 2/2020 which gained over $20 per $1000 face value bond. Boeing’s stock ended the day a hair below yesterday’s close. The only news surrounding Boeing was an article in Bloomberg about their pension plan potentially being underfunded, as a result of the low-yield bond environment. Other large gainers included bonds from Merck (MRK) and AT&T (T) and GE.
The big loser of the day was Alcoa (AA). Its 5.4% coupon bond maturing 4/2021 lost over $30. While there was no news on Alcoa today, its bonds have been on a topsy-turvy ride recently. Perhaps the bond of this highly cyclical aluminum producer is moving up and down with the perceptions of global economic growth. The bonds of Caterpillar (CAT) and Phizer (PFE) had down days.
The yields on shorter maturity treasuries were basically unchanged for the day. While, 10 and 30 year treasury bond yields rose 0.02 and 0.03% respectively. All around a slow day for the bond market.