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Weekly Market Summary

Apr 8 to Apr 12, 2024

View Current Performance

Extra Credit*

  • Despite uncertainty surrounding potential Fed rate cuts, economic strength and diminishing recession fears led to the best Q1 U.S. market performance since 2019. Mega-cap dominance was quite robust in the quarter and month, with the S&P 500 Top 50 up 2.27% and 12.11% for the quarter. The S&P 500 posted eight new closing highs in March to total 22 year-to-date (YTD-3/31/24). Should this continue for the 500, it would replace 1995’s record of 77 new closing highs. The Magnificent Seven turned into the Final Four, as the other 493 names were up 6.40% year-to-date. The S&P 500 continued its upward march in March with the index finishing the month up 3.22% and 10.56% for the quarter. The index broke through the 5,100 and 5,200 levels with intraday highs of 5,254.35 and 5,264.85. The last five-month run has added nearly $8.9 trillion into investor pockets. The Magnificent Seven (29% of the market value of the S&P 500) accounted for 37% of the YTD (3/31/24) return (of the 10.56%), but a new Final Four (18% of the S&P 500) has risen to the top for 2024, as Nvidia, Microsoft, Meta Platforms and Amazon.com, with their gains accounting for 47% of the YTD (3/31/24) return.
  • The Bloomberg US Aggregate Bond Index returned -0.27% in January, as the 10-year Treasury rate increased 11 basis points from 3.88% to 3.99% and the 10-year/2-year Treasury spread finished at -0.28%. The 30-year Treasury rate was higher at 4.35%. Option-adjusted spreads were mostly wider for corporate debt with investment-grade corporate bonds 3 basis points tighter, high-yield bonds 21 basis points wider, and bank loans 1 basis points wider for March. Investment-grade corporate bonds: Single A corporate bonds were down -0.22% vs. -0.13% for BBB corporates, as credit quality was not the main driver for March’s performance. Duration was the main driver for returns, as short-duration investment-grade corporate bonds were up 0.45% vs. -0.93% for long investment-grade corporate bonds. High-yield bonds: The asset class saw BB high-yield underperform (BB bonds returned 0.06% vs. 1.81% for CC and below high-yield corporates). March also saw longer duration names outperform, as long-duration high yield outperformed the broad index for the month by 0.28%. Bank loans: Higher-quality loans underperformed, as single B loans returned 0.80% vs. 0.57% for BB loans. Large, more liquid loans underperformed, as loan facility sizes of $1 billion or more returned 0.65% vs. 1.10% for facility sizes of $201-$300 million. Distressed loans outperformed, as loans priced $60 and up to and including $80 returned 0.86% vs. 0.72% for loans over $90.
  • Bank-loan and high-yield bond default rates, excluding distressed exchanges, finished March at 1.86% and 1.67%, respectively, up from 1.77% and 1.66% in February. The 25-year historical default rate for loans and high-yield bonds is 3.00% and 3.40%, respectively.

Any discussion of individual companies is not intended as recommendation to buy, hold or sell securities issued by those companies. Aristotle fund holdings can be found on the fund pages linked above.

The Magnificent Seven are Apple, Microsoft, Alphabet (Google), Amazon, Meta Platforms, NVIDIA and Tesla.

Sources: Bloomberg and JP Morgan as of 4/8/24.

Yield as of:
Apr 12, 2023
High-Yield Bonds
Investment-Grade Corporates
Last Week
Prior Week
Start of the Year
Option Adjusted Spread as of:
Apr 12, 2023
High-Yield Bonds
Investment-Grade Corporates
Last Week
310 bps
480 bps
84 bps
Prior Week
303 bps
479 bps
84 bps
Start of the Year
323 bps
501 bps
93 bps
Prices as of:
Apr 12, 2023
High-Yield Bonds
Investment-Grade Corporates
Last Week
Prior Week
Start of the Year

*Source: Morningstar®, Bloomberg, Credit Suisse. OAS is Options Adjusted Spread. 4-year discount margin is used for spread for bank loans. Yield quoted is yield-to-worst or equivalent calculation. YTD Low / High for yields are based on end of week and not intraday movements. Indexes and sub-indexes: Investment-grade corporates represented by Bloomberg US Corporate Bond Index. High-yield bonds represented by Bloomberg US Corporate High Yield Index. Bank loans represented by Credit Suisse Leverage Loan Index. The red and green arrows depicted under Yields, Option Adjusted Spreads, and Prices indicate a higher or lower value from the previous week.

Past performance does not guarantee future results. Index performance is not indicative of fund performance. Indexes are unmanaged and it is not possible to invest directly in an index.

Investors should consider a fund’s investment goal, risks, charges, and expenses carefully before investing. The prospectus and/or the applicable summary prospectus contain this and other information about the Fund and are available from AristotleFunds.com. The prospectus and/or summary prospectus should be read carefully before investing.

Investing involves risk. Principal loss is possible.

Foreside Financial Services, LLC, distributor.

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