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Weekly Market Summary

Jan 29 to Feb 2, 2024

View Current Performance

Extra Credit*

  • The Conference Board's Consumer Confidence Index increased to 114.8 in January, up from 108.0 the prior month. It’s the highest level of consumer confidence since December 2021 and the third consecutive monthly increase. With January’s print, the index moved significantly above the 103-106 range, at which it had been hovering near since the end of 2022. The index rose in January due to more positive views on income prospects along with business and employment conditions.
  • The boost in consumer confidence can be partly attributed to consumers reacting positively to declining inflation, specifically in core PCE inflation that is a key indicator for the Federal Reserve in deciding whether to cut interest rates. 
  • In January, a larger share of respondents viewed business conditions as “good” (22.5%, up from 21.1% in December), and the percentage viewing them as “bad” declined (from 17.2% in December to 14.2%).This was alongside an increase of consumers viewing business conditions as “normal” (from 61.7% to 63.3%).
  • Labor-market views showed improved optimism. Respondents who viewed jobs as “plentiful” increased month-over-month (45.5%vs. 40.4%), while those who considered them “not so plentiful” declined (from46.5% down to 44.7%). Those who considered them “hard to get” declined (13.1%in December to 9.8% in January).
  • Predictions for this week’s Federal Reserve meeting showed a 97.9% probability for a continued pause in the rate-hiking cycle. Expectations for a first rate cut of25 basis points still point to May.
  • Bank-loan and high-yield bond default rates, excluding distressed exchanges, finished the month at 2.10% and 2.08%, respectively, up and unchanged from 2.01% and 2.08%in November. The 25-year historical default rate for loans and high-yield bonds is 3% and 3.4%, respectively.

Sources: Bloomberg and JP Morgan as of 1/30/24.

Yield as of:
Feb 2, 2023
High-Yield Bonds
Bank-Loans
Investment-Grade Corporates
Last Week
7.76%
10.55%
5.12%
Prior Week
7.75%
10.58%
5.17%
Start of the Year
7.59%
10.60%
5.00%
Option Adjusted Spread as of:
Feb 2, 2023
High-Yield Bonds
Bank-Loans
Investment-Grade Corporates
Last Week
330 bps
500 bps
91 bps
Prior Week
325 bps
500 bps
87 bps
Start of the Year
323 bps
501 bps
93 bps
Prices as of:
Feb 2, 2023
High-Yield Bonds
Bank-Loans
Investment-Grade Corporates
Last Week
$92.72
$95.53
$92.95
Prior Week
$92.73
$95.57
$92.48
Start of the Year
$93.07
$95.32
$93.70

*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.

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.

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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