Economic Calendar

Wednesday, June 12: FOMC interest-rate decision

Thursday, June 13: Initial Jobless Claims

Friday, June 14: Import Price Index

S&P 500

WoW
1.32%
YTD
12.10%
YOY
24.52%
15.6x LTM EBITDA; 13.0x NTM EBITDA

Dow Jones

WoW
0.29%
YTD
2.94%
YOY
14.68%
11.4x LTM EBITDA; 12.4x NTM EBITDA

Nasdaq

WoW
2.38%
YTD
14.13%
YOY
29.42%

Ten Year US Treasury Yield

WoW
4.49%
YTD
57 bps
YOY
72 bps

Currency

British Pound per USD: $1.27

WoW
0.2%
YTD
0.0%
YOY
1.3%

Euro per USD: $1.08

WoW
0.4%
YTD
2.2%
YOY
0.2%

USD per Yen: ¥156.76;

WoW
0.3%
YTD
11.3%
YOY
12.8%

Swiss franc per EUR: 1.03 CH₣

WoW
1.1%
YTD
4.1%
YOY
0.1%

U.S. News

  • U.S. Employment Report
    • U.S. added 272,000 jobs in May, surpassing the expected 180,000 and the 165,000 jobs added in April
    • The unemployment rate increased to 4% in May, up from 3.9% in April, marking the first time it has reached this level since January 2022
    • Average hourly earnings rose by 0.4% in May and 4.1% year-over-year, reversing a previous downward trend
  • Factory Orders
    • New orders for manufactured goods in April increased by $4.3 billion (0.7%) to $588.2 billion, marking the third consecutive month of growth
    • Shipments of manufactured goods in April increased by $5.9 billion (1.0%) to $590.2 billion
    • Inventories of manufactured goods in April increased by $0.9 billion (0.1%) to $858.3 billion
  • Trade Deficit
    • The U.S. trade deficit surged by almost 9% in April to $74.6 billion, the highest in 18 months
    • Imports rose by 2.4% to $338.2 billion, driven by higher demand for cars, computer accessories, and capital goods
    • Exports increased by 0.8% to $263.7 billion, with a notable rise in pharmaceutical drug shipments
  • Jobless Claims
    • Initial jobless claims, a measure of how many workers were laid off across the U.S., increased to 229,000 in the week ended May 31, up 8,000 from the prior week
    • The four-week moving average was 222,250, down 750 from the prior week
    • Continuing claims – those filed by workers unemployed for longer than a week – increased by 2,000 to 1.792 million in the week ended May 24. This figure is reported with a one-week lag

  • Fed’s Balance Sheet
    • The Federal Reserve’s assets totaled $7.256 trillion in the week ended June 7, down $28.6 billion from the prior week
    • Treasury holdings totaled $4.465 trillion, down $24.1 billion from the prior week
    • Holdings of mortgage-backed securities (MBS) were $2.35 trillion in the week, down $15.7 billion from the prior week

  • Total Public Debt
    • Total public debt outstanding was $34.67 trillion as of June 7, an increase of 8.6% from the previous year
    • Debt held by the public was $25.07 trillion, and intragovernmental holdings were $7.06 trillion
  • Inflation Factors
    • CPI:
      • The consumer-price index rose 3.4% in April year over year
      • On a monthly basis, the CPI increased 0.3% in April on a seasonally adjusted basis, after increasing 0.4% in March
      • The index for all items less food and energy (core CPI) rose 0.3% in April, after rising 0.4% in March
      • Core CPI increased 3.6% for the 12 months ending April
    • Food and Beverages:
      • The food at home index increased 1.1% in April from the same month a year earlier, and decreased -0.2% in April month over month
      • The food away from home index increased 4.1% in April from the same month a year earlier, and increased 0.3% in April month over month
    • Commodities:
      • The energy commodities index increased 2.7% in April after increasing 1.5% in
      • The energy commodities index fell 1.1% over the last 12 months
      • The energy services index (1.3%) in March after decreasing (0.0%) in March
      • The energy services index rose 3.6% over the last 12 months
      • The gasoline index rose 1.2% over the last 12 months
      • The fuel oil index fell (0.8%) over the last 12 months
      • The index for electricity rose 5.1% over the last 12 months
      • The index for natural gas fell (1.9%) over the last 12 months
    • Supply Chain:
      • Drewry’s composite World Container Index increased to $4,716.22 per 40ft container for
      • Drewry’s composite World Container Index has increased by 180.6% over the last 12 months
    • Housing Market:
      • The shelter index increased 0.4% in April after increasing 0.4% in March
      • The rent index increased 0.4% in April after increasing 0.5% in March
      • The index for lodging away from home increased 0.9% in April after increasing 5.6% in March
  • Federal Funds Rate
    • The effective Federal Funds Rate is at 5.33%, flat 0.00% year to date

World News

  • Israel/Gaza
    • An Israeli military operation on Saturday rescued four Israeli hostages from Gaza, resulting in over 200 Palestinian casualties according to Hamas, although Israel disputes this number
    • The U.S. and Israeli officials are renewing efforts for a cease-fire and a broader deal, with U.S. Secretary of State Antony Blinken visiting the Middle East to push for negotiations
    • The rescue operation has intensified positions on both sides, with Israel emphasizing military pressure and Hamas demanding guarantees for the safety of Gazans before further talks
  • Russia
    • French President Emmanuel Macron and US President Joe Biden released a joint “roadmap” supporting efforts to use frozen Russian assets to aid Ukraine during Biden’s state visit to Paris
    • At least 28 people died after Ukrainian attacks on Russian-held areas in the Luhansk and Kherson regions, according to Russian-installed authorities
    • Russian forces have installed eight barges on the southern side of the Kerch Bridge in Crimea to defend against Ukrainian attacks, according to the UK Ministry of Defence
  • Europe
    • The European Central Bank (ECB) lowered its key interest rate to 3.75% from 4%, marking the first rate cut since 2019
    • The The ECB’s decision diverges from the Federal Reserve, which is not expected to reduce rates for several months
    • The ECB’s decision comes amid persistent inflationary pressures in Europe, with underlying inflation in the eurozone rising to 2.9% in May from 2.7% in April
  • China
    • China’s exports rose by 7.6% in May compared to the previous year, up from a 1.5% increase in April
    • Exports to the Association of Southeast Asian Nations increased by 22.5% in May, while exports to the U.S. rose by 3.6%, reversing a decline in April
    • China’s imports grew by 1.8% in May, down from an 8.4% increase in April, resulting in a trade surplus of $82.62 billion for the month
  • South Korea
    • South Korea’s exports rose 11.7% in May, led by a 55% increase in semiconductor shipments, contributing to a trade surplus of $4.96 billion
  • India
    • Indian Prime Minister Narendra Modi’s BJP failed to secure an outright majority in the recent election, winning around 240 seats, but Modi is poised to keep power for a third term through coalition alliances
  • South Africa
    • South Africa’s ruling African National Congress (ANC) is seeking to form a government of national unity after losing its absolute majority in the recent national elections, winning only 40% of the vote
  • Mexico
    • Claudia Sheinbaum, Mexico City’s former mayor, is projected to become Mexico’s first female president, winning by a landslide against the opposition coalition’s candidate, Xóchitl Gálvez
  • UK
    • Nigel Farage has re-entered British politics as the leader of Reform UK, aiming to challenge the Conservative Party and influence the upcoming election with his anti-immigration and populist platform
  • Canada
    • The Bank of Canada cut its main interest rate by 0.25%, becoming the first G-7 central bank to ease policy amid cooling inflation and slower economic growth
  • Germany
    • German industrial production decreased by 0.1% in April compared to the previous month, following a 0.4% decline in March, and missed economists’ forecast of a 0.2% increase
  • Iceland
    • A volcano in southwestern Iceland erupted for a fifth time since December, forcing the evacuation of a nearby town and the Blue Lagoon geothermal spa

Commodities

  • Oil Prices
    • WTI: $75.28 per barrel
      • (2.22%) WoW; +5.07% YTD; +5.60% YoY
    • Brent: $79.39 per barrel
      • (2.73%) WoW; +3.05% YTD; +4.52% YoY
  • US Production
    • U.S. oil production amounted to 13.1 million bpd for the week ended May 31, down 0.0 million bpd
      from the prior week
  • Rig Count
    • The total number of oil rigs amounted to 594, down 6 from last week
  • Inventories
    • Crude Oil
      • Total U.S. crude oil inventories now amount to 455.9 million barrels, down (0.7%) YoY
      • Refiners operated at a capacity utilization rate of 95.4% for the week, up from 94.3% in the prior week
      • U.S. crude oil imports now amount to 6.769 million barrels per day, down 10.3% YoY
    • Gasoline
      • Retail average regular gasoline prices amounted to $3.47 per gallon in the week of June 7,
        down (3.1%) YoY

        • Gasoline prices on the East Coast amounted to $3.55, up 1.1% YoY
        • Gasoline prices in the Midwest amounted to $3.43, down (2.1%) YoY
        • Gasoline prices on the Gulf Coast amounted to $3.14, down (0.3%) YoY
        • Gasoline prices in the Rocky Mountain region amounted to $3.48, down (7.8%) YoY
        • Gasoline prices on the West Coast amounted to $4.61, down (0.3%) YoY
      • Motor gasoline inventories were up by 2.1 million barrels from the prior week
      • Motor gasoline inventories amounted to 230.9 million barrels, up 5.5% YoY
      • Production of motor gasoline averaged 9.48 million bpd, down (5.8%) YoY
      • Demand for motor gasoline amounted to 8.946 million bpd, down (3.0%) YoY
    • Distillates
      • Distillate inventories decreased by 2.5 million in the week of May 31
      • Total distillate inventories amounted to 119.3 million barrels, up 11.8% YoY
      • Distillate production averaged 5.030 million bpd, down (0.2%) YoY
      • Demand for distillates averaged 3.795 million bpd in the week, up 4.1% YoY
    • Natural Gas
      • Natural gas inventories increased by 84 billion cubic feet last week
      • Total natural gas inventories now amount to 2,795 billion cubic feet, up 14.3% YoY

Credit News

High yield bond yields decreased 14bps to 7.81% and spreads increased 9bps to 337bps. Leveraged loan yields decreased 26bps to 9.24% and spreads decreased 1bps to 492bps. WTD Leveraged loan returns were positive 20bps. WTD high yield bond returns were positive 80bps. 10yr treasury yields decreased 27bps to 4.28%. Yields came down due to the recent rise in rate volatility, stronger-than expected non-farm US payroll, job growth rebound, and expectation of only one Fed rate cut for 2024.

High-yield:

Week ended 06/07/2024

  • Yields & Spreads1
  • Pricing & Returns1
  • Fund Flows2
  • New Issue2
  • Distressed Level (trading in excess of 1,000 bps)2
  • Total HY Defaults

1 Source: Credit Suisse High Yield and Leveraged Loan Index
2 Source: JP Morgan

Leveraged loans:

Week ended 06/07/2024

  • Yields & Spreads1
  • Leveraged Loan Index1
  • Fund Flows2
  • New Issue2
  • Distressed Level (loan price below $80)1
  • Total Loan Defaults
Default activity:
  • Most recent defaults include: 99 Cents Only Stores ($350mn, 4/7/24), ConvergeOne ($1.3bn, 4/4/24), Xplornet Communications ($1.2bn, 3/31/24), JoAnn Stores ($658mn, 3/18/24), New Insight Holdings ($1.2bn, 3/13/24), Robertshaw ($820mn, 2/29/24), Thrasio LLC ($724mn, 2/28/24), Hornblower ($838mn, 2/20/24), and Careismatic ($700mn, 1/22/24).
CLOs:

Week ended 06/07/2024

  • New U.S. CLO Issuance2
  • New U.S. CLO Issuance2

Note:High-yield and leveraged loan yields and spreads are swap-adjusted

1 Source: Credit Suisse High Yield and Leveraged Loan Index
2 Source: JP Morgan

Ratings activity:
  • S&P and Moody’s High Yield Ratings
Appendix:

Diagram A: Leveraged Loan Trading Levels

Source: Credit Suisse Leveraged Loan Index

Diagram B: High Yield and Leveraged Loan LTM Price

Diagram C: Leveraged Loan and High Yield Returns


Diagram J: Leveraged Loan Defaults by Sector – Full Year

Diagram L: CLO Economics

Diagram N: Developed Country GovBond Yields (%)

Diagram O: S&P 500 Historical Multiples

Diagram P: U.S. Middle-Market M&A Valuations (EV/EBITDA)

Diagram Q: U.S. Large Cap M&A Valuations (EV/EBITDA

Diagram R: Dry Powder for All Private Equity Buyouts

Diagram S: Structured Credit Spreads

Diagram T: Structured Credit Yield

Diagram U: SOFR CURVE


Freight Rates

Drewry World Container Index

China-Global & Shanghai Export Container Freight Index

Real Estate

Section 1:

  • During the record year of 2023, spending on factory construction spiked by 71% from 2022, and by 138% from 2021, to $196 billion
  • As seen in the above graph, a notable spike started in late 2021. The surge coincides with the passage of the CHIPS Act in August 2022, which could be a contributing factor
  • A result of a massive corporate and government rethink after the supply-chain and transportation chaos during the pandemic

  • On a year-over-year basis, the PPI for nonresidential construction has been negative for the first four months of 2024
  • Construction costs for non-factory buildings are down, yet factory building investment is surging.
  • Businesses are prioritizing building new factories despite potentially lower overall construction costs elsewhere
  • The explanation lies in expensive, specialized equipment needed for modern factories, which isn’t captured in construction spending data

Section 2:
30 Year Fixed Mortgage
6/6/24: 6.99

10-year US Treasury
6/5/24: 4.29

U.S. News

  • U.S. Employment Report
    • U.S. added 272,000 jobs in May, surpassing the expected 180,000 and the 165,000 jobs added in April
    • The unemployment rate increased to 4% in May, up from 3.9% in April, marking the first time it has reached this level since January 2022
    • Average hourly earnings rose by 0.4% in May and 4.1% year-over-year, reversing a previous downward trend
  • Factory Orders
    • New orders for manufactured goods in April increased by $4.3 billion (0.7%) to $588.2 billion, marking the third consecutive month of growth
    • Shipments of manufactured goods in April increased by $5.9 billion (1.0%) to $590.2 billion
    • Inventories of manufactured goods in April increased by $0.9 billion (0.1%) to $858.3 billion
  • Trade Deficit
    • The U.S. trade deficit surged by almost 9% in April to $74.6 billion, the highest in 18 months
    • Imports rose by 2.4% to $338.2 billion, driven by higher demand for cars, computer accessories, and capital goods
    • Exports increased by 0.8% to $263.7 billion, with a notable rise in pharmaceutical drug shipments
  • Jobless Claims
    • Initial jobless claims, a measure of how many workers were laid off across the U.S., increased to 229,000 in the week ended May 31, up 8,000 from the prior week
    • The four-week moving average was 222,250, down 750 from the prior week
    • Continuing claims – those filed by workers unemployed for longer than a week – increased by 2,000 to 1.792 million in the week ended May 24. This figure is reported with a one-week lag

  • Fed’s Balance Sheet
    • The Federal Reserve’s assets totaled $7.256 trillion in the week ended June 7, down $28.6 billion from the prior week
    • Treasury holdings totaled $4.465 trillion, down $24.1 billion from the prior week
    • Holdings of mortgage-backed securities (MBS) were $2.35 trillion in the week, down $15.7 billion from the prior week

  • Total Public Debt
    • Total public debt outstanding was $34.67 trillion as of June 7, an increase of 8.6% from the previous year
    • Debt held by the public was $25.07 trillion, and intragovernmental holdings were $7.06 trillion
  • Inflation Factors
    • CPI:
      • The consumer-price index rose 3.4% in April year over year
      • On a monthly basis, the CPI increased 0.3% in April on a seasonally adjusted basis, after increasing 0.4% in March
      • The index for all items less food and energy (core CPI) rose 0.3% in April, after rising 0.4% in March
      • Core CPI increased 3.6% for the 12 months ending April
    • Food and Beverages:
      • The food at home index increased 1.1% in April from the same month a year earlier, and decreased -0.2% in April month over month
      • The food away from home index increased 4.1% in April from the same month a year earlier, and increased 0.3% in April month over month
    • Commodities:
      • The energy commodities index increased 2.7% in April after increasing 1.5% in
      • The energy commodities index fell 1.1% over the last 12 months
      • The energy services index (1.3%) in March after decreasing (0.0%) in March
      • The energy services index rose 3.6% over the last 12 months
      • The gasoline index rose 1.2% over the last 12 months
      • The fuel oil index fell (0.8%) over the last 12 months
      • The index for electricity rose 5.1% over the last 12 months
      • The index for natural gas fell (1.9%) over the last 12 months
    • Supply Chain:
      • Drewry’s composite World Container Index increased to $4,716.22 per 40ft container for
      • Drewry’s composite World Container Index has increased by 180.6% over the last 12 months
    • Housing Market:
      • The shelter index increased 0.4% in April after increasing 0.4% in March
      • The rent index increased 0.4% in April after increasing 0.5% in March
      • The index for lodging away from home increased 0.9% in April after increasing 5.6% in March
  • Federal Funds Rate
    • The effective Federal Funds Rate is at 5.33%, flat 0.00% year to date

World News

  • Israel/Gaza
    • An Israeli military operation on Saturday rescued four Israeli hostages from Gaza, resulting in over 200 Palestinian casualties according to Hamas, although Israel disputes this number
    • The U.S. and Israeli officials are renewing efforts for a cease-fire and a broader deal, with U.S. Secretary of State Antony Blinken visiting the Middle East to push for negotiations
    • The rescue operation has intensified positions on both sides, with Israel emphasizing military pressure and Hamas demanding guarantees for the safety of Gazans before further talks
  • Russia
    • French President Emmanuel Macron and US President Joe Biden released a joint “roadmap” supporting efforts to use frozen Russian assets to aid Ukraine during Biden’s state visit to Paris
    • At least 28 people died after Ukrainian attacks on Russian-held areas in the Luhansk and Kherson regions, according to Russian-installed authorities
    • Russian forces have installed eight barges on the southern side of the Kerch Bridge in Crimea to defend against Ukrainian attacks, according to the UK Ministry of Defence
  • Europe
    • The European Central Bank (ECB) lowered its key interest rate to 3.75% from 4%, marking the first rate cut since 2019
    • The The ECB’s decision diverges from the Federal Reserve, which is not expected to reduce rates for several months
    • The ECB’s decision comes amid persistent inflationary pressures in Europe, with underlying inflation in the eurozone rising to 2.9% in May from 2.7% in April
  • China
    • China’s exports rose by 7.6% in May compared to the previous year, up from a 1.5% increase in April
    • Exports to the Association of Southeast Asian Nations increased by 22.5% in May, while exports to the U.S. rose by 3.6%, reversing a decline in April
    • China’s imports grew by 1.8% in May, down from an 8.4% increase in April, resulting in a trade surplus of $82.62 billion for the month
  • South Korea
    • South Korea’s exports rose 11.7% in May, led by a 55% increase in semiconductor shipments, contributing to a trade surplus of $4.96 billion
  • India
    • Indian Prime Minister Narendra Modi’s BJP failed to secure an outright majority in the recent election, winning around 240 seats, but Modi is poised to keep power for a third term through coalition alliances
  • South Africa
    • South Africa’s ruling African National Congress (ANC) is seeking to form a government of national unity after losing its absolute majority in the recent national elections, winning only 40% of the vote
  • Mexico
    • Claudia Sheinbaum, Mexico City’s former mayor, is projected to become Mexico’s first female president, winning by a landslide against the opposition coalition’s candidate, Xóchitl Gálvez
  • UK
    • Nigel Farage has re-entered British politics as the leader of Reform UK, aiming to challenge the Conservative Party and influence the upcoming election with his anti-immigration and populist platform
  • Canada
    • The Bank of Canada cut its main interest rate by 0.25%, becoming the first G-7 central bank to ease policy amid cooling inflation and slower economic growth
  • Germany
    • German industrial production decreased by 0.1% in April compared to the previous month, following a 0.4% decline in March, and missed economists’ forecast of a 0.2% increase
  • Iceland
    • A volcano in southwestern Iceland erupted for a fifth time since December, forcing the evacuation of a nearby town and the Blue Lagoon geothermal spa

Commodities

  • Oil Prices
    • WTI: $75.28 per barrel
      • (2.22%) WoW; +5.07% YTD; +5.60% YoY
    • Brent: $79.39 per barrel
      • (2.73%) WoW; +3.05% YTD; +4.52% YoY
  • US Production
    • U.S. oil production amounted to 13.1 million bpd for the week ended May 31, down 0.0 million bpd
      from the prior week
  • Rig Count
    • The total number of oil rigs amounted to 594, down 6 from last week
  • Inventories
    • Crude Oil
      • Total U.S. crude oil inventories now amount to 455.9 million barrels, down (0.7%) YoY
      • Refiners operated at a capacity utilization rate of 95.4% for the week, up from 94.3% in the prior week
      • U.S. crude oil imports now amount to 6.769 million barrels per day, down 10.3% YoY
    • Gasoline
      • Retail average regular gasoline prices amounted to $3.47 per gallon in the week of June 7,
        down (3.1%) YoY

        • Gasoline prices on the East Coast amounted to $3.55, up 1.1% YoY
        • Gasoline prices in the Midwest amounted to $3.43, down (2.1%) YoY
        • Gasoline prices on the Gulf Coast amounted to $3.14, down (0.3%) YoY
        • Gasoline prices in the Rocky Mountain region amounted to $3.48, down (7.8%) YoY
        • Gasoline prices on the West Coast amounted to $4.61, down (0.3%) YoY
      • Motor gasoline inventories were up by 2.1 million barrels from the prior week
      • Motor gasoline inventories amounted to 230.9 million barrels, up 5.5% YoY
      • Production of motor gasoline averaged 9.48 million bpd, down (5.8%) YoY
      • Demand for motor gasoline amounted to 8.946 million bpd, down (3.0%) YoY
    • Distillates
      • Distillate inventories decreased by 2.5 million in the week of May 31
      • Total distillate inventories amounted to 119.3 million barrels, up 11.8% YoY
      • Distillate production averaged 5.030 million bpd, down (0.2%) YoY
      • Demand for distillates averaged 3.795 million bpd in the week, up 4.1% YoY
    • Natural Gas
      • Natural gas inventories increased by 84 billion cubic feet last week
      • Total natural gas inventories now amount to 2,795 billion cubic feet, up 14.3% YoY

Credit News

High yield bond yields decreased 14bps to 7.81% and spreads increased 9bps to 337bps. Leveraged loan yields decreased 26bps to 9.24% and spreads decreased 1bps to 492bps. WTD Leveraged loan returns were positive 20bps. WTD high yield bond returns were positive 80bps. 10yr treasury yields decreased 27bps to 4.28%. Yields came down due to the recent rise in rate volatility, stronger-than expected non-farm US payroll, job growth rebound, and expectation of only one Fed rate cut for 2024.

High-yield:

Week ended 06/07/2024

  • Yields & Spreads1
  • Pricing & Returns1
  • Fund Flows2
  • New Issue2
  • Distressed Level (trading in excess of 1,000 bps)2
  • Total HY Defaults

1 Source: Credit Suisse High Yield and Leveraged Loan Index
2 Source: JP Morgan

Leveraged loans:

Week ended 06/07/2024

  • Yields & Spreads1
  • Leveraged Loan Index1
  • Fund Flows2
  • New Issue2
  • Distressed Level (loan price below $80)1
  • Total Loan Defaults
Default activity:
  • Most recent defaults include: 99 Cents Only Stores ($350mn, 4/7/24), ConvergeOne ($1.3bn, 4/4/24), Xplornet Communications ($1.2bn, 3/31/24), JoAnn Stores ($658mn, 3/18/24), New Insight Holdings ($1.2bn, 3/13/24), Robertshaw ($820mn, 2/29/24), Thrasio LLC ($724mn, 2/28/24), Hornblower ($838mn, 2/20/24), and Careismatic ($700mn, 1/22/24).
CLOs:

Week ended 06/07/2024

  • New U.S. CLO Issuance2
  • New U.S. CLO Issuance2

Note:High-yield and leveraged loan yields and spreads are swap-adjusted

1 Source: Credit Suisse High Yield and Leveraged Loan Index
2 Source: JP Morgan

Ratings activity:
  • S&P and Moody’s High Yield Ratings
Appendix:

Diagram A: Leveraged Loan Trading Levels

Source: Credit Suisse Leveraged Loan Index

Diagram B: High Yield and Leveraged Loan LTM Price

Diagram C: Leveraged Loan and High Yield Returns


Diagram J: Leveraged Loan Defaults by Sector – Full Year

Diagram L: CLO Economics

Diagram N: Developed Country GovBond Yields (%)

Diagram O: S&P 500 Historical Multiples

Diagram P: U.S. Middle-Market M&A Valuations (EV/EBITDA)

Diagram Q: U.S. Large Cap M&A Valuations (EV/EBITDA

Diagram R: Dry Powder for All Private Equity Buyouts

Diagram S: Structured Credit Spreads

Diagram T: Structured Credit Yield

Diagram U: SOFR CURVE


Freight Rates

Drewry World Container Index

China-Global & Shanghai Export Container Freight Index

Real Estate

Section 1:

  • During the record year of 2023, spending on factory construction spiked by 71% from 2022, and by 138% from 2021, to $196 billion
  • As seen in the above graph, a notable spike started in late 2021. The surge coincides with the passage of the CHIPS Act in August 2022, which could be a contributing factor
  • A result of a massive corporate and government rethink after the supply-chain and transportation chaos during the pandemic

  • On a year-over-year basis, the PPI for nonresidential construction has been negative for the first four months of 2024
  • Construction costs for non-factory buildings are down, yet factory building investment is surging.
  • Businesses are prioritizing building new factories despite potentially lower overall construction costs elsewhere
  • The explanation lies in expensive, specialized equipment needed for modern factories, which isn’t captured in construction spending data

Section 2:
30 Year Fixed Mortgage
6/6/24: 6.99

10-year US Treasury
6/5/24: 4.29

S&P 500

WoW
1.32%
YTD
12.10%
YOY
24.52%
15.6x LTM EBITDA; 13.0x NTM EBITDA

Dow Jones

WoW
0.29%
YTD
2.94%
YOY
14.68%
11.4x LTM EBITDA; 12.4x NTM EBITDA

Nasdaq

WoW
2.38%
YTD
14.13%
YOY
29.42%

Ten Year US Treasury Yield

WoW
4.49%
YTD
57 bps
YOY
72 bps

Currency

British Pound per USD: $1.27

WoW
0.2%
YTD
0.0%
YOY
1.3%

Euro per USD: $1.08

WoW
0.4%
YTD
2.2%
YOY
0.2%

USD per Yen: ¥156.76;

WoW
0.3%
YTD
11.3%
YOY
12.8%

Swiss franc per EUR: 1.03 CH₣

WoW
1.1%
YTD
4.1%
YOY
0.1%