The U.S. leveraged loan asset class, which just stumbled through its worth month in seven years, saw a record one-day gain on Friday, with the S&P/LSTA Loan Index advancing 0.94%.
That movement marks a dramatic whip-saw for loans, which have seen a rout over the past two months as fears of a broader economic slowdown took root. On Friday, however, at least two high-profile economic yardsticks buoyed the financial markets, as the December jobs report of plus 312,000 topped expectations, as did wage growth of 3.2%.
The 0.94% gain in loans was more than twice the prior record, a 0.46% advance on Dec. 18, 2014, amid a volatile period for the asset class, due in part to plunging oil prices.
To put Friday’s gain in perspective, U.S. leveraged loans lost a total of 2.54% in December, helping wipe out advances seen throughout the year. For all of 2018 leveraged loans returned 0.44%, the third-worst showing since the inception of the S&P/LSTA Index, 19 years ago.
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