Morning Commentary: Market focuses on Fed rate decision; Disney notes tighten; JPMorgan firms

By Cristal Cody

Tupelo, Miss., Sept. 17 – Investment-grade bonds traded mostly better early Thursday while market participants were mostly focused on the Federal Reserve’s interest rate decision scheduled for later in the day.

Market opinion was mixed on whether the Fed will raise rates following the two-day monetary policy meeting.

“Our position is that the FOMC will raise the target to a range of 25 [basis points] to 50 bps, up from zero to 25 bps,” Confluence Investment Management LLC strategists said in a note on Thursday. “This is a minority opinion at this point.”

In secondary trading, Walt Disney Co.’s 3.15% senior notes due 2025 improved about 5 bps.

JPMorgan Chase & Co.’s 3.9% senior holding company notes due 2025 traded 2 bps tighter.

The three-month Libor yield dropped 1 bp to 33 bps on Thursday.

The Markit CDX North American Investment Grade index ended the previous session 2 bps tighter at a spread of 77 bps.

Disney tightens

Walt Disney’s 3.15% notes due 2025 firmed about 5 bps from Wednesday to 86 bps offered in the secondary market, a source said.

Walt Disney sold $750 million of the notes (A2/ A/A) on Monday at a spread of 100 bps over Treasuries.

The entertainment and media company is based in Burbank, Calif.

JPMorgan firms

JPMorgan Chase’s 3.9% notes due 2025 firmed 2 bps to 141 bps offered, according to a market source.

JPMorgan Chase sold $2.5 billion of the notes (A3/A/A+) on July 14 at Treasuries plus 155 bps.

The financial services company is based in New York City.

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