ISM Services

• The Services PMI rose to 54.5% in May — beating the 53.9% consensus and up from 53.6% in April — marking the 23rd consecutive month of expansion and signaling that the services sector remains resilient despite mounting inflation and energy cost pressures
• New Orders surged to 57.3%, up 3.8 points from April and above the 12-month average of 54.7%, pointing to robust forward demand momentum heading into the summer
• Business Activity climbed to 57.7%, up 1.8 points, reinforcing the picture of an economy where the consumer-facing services backbone is holding firm even as manufacturing and sentiment indicators tell a more cautious story

ADP Employment

• Private sector payrolls rose by 122,000 in May — the strongest monthly gain since January 2025 and above the 110,000 consensus — with gains notably broad-based across nine of ten industries, a marked departure from recent months where healthcare dominated
• Small businesses led with 67,000 new hires, followed by large employers at 40,000, while education and health services added 57,000 and trade, transportation, and utilities contributed 36,000
• Job-stayer pay held steady at 4.4% YoY while job-changer pay edged down to 6.5% — a modest but consistent signal that wage pressure, while still elevated, is not reaccelerating

Jobs Report

• The U.S. economy added 172,000 nonfarm payrolls in May — more than double the 85,000 consensus estimate — with unemployment unchanged at 4.3%, delivering a decisive beat that signals the labor market is far more resilient than feared
• Gains were led by leisure and hospitality (+70,000), local government (+55,000), and health care (+35,000), while March and April were revised up by a combined 93,000 — meaning the prior two months were materially stronger than initially reported
• Labor force participation held at 61.8% and long-term unemployment continues to creep higher at 2.0 million — up 524,000 over the year — adding a cautionary undertone to an otherwise unambiguously strong headline print

Jobless Claims 

• Initial jobless claims, a measure of how many workers were laid off across the U.S., increased to 225,000 in the week ended May 29, up 13,000 from the prior week
• The four-week moving average was 214,750, up 6,500 from the prior week
• Continuing claims – those filed by workers unemployed for longer than a week – decreased at 1.777 million in the week ended May 22. This figure is reported with a one-week lag

Fed’s Balance Sheet

• The Federal Reserve's assets totaled $6.711 trillion in the week ended June 5, up $7.1 billion from the prior week
• Treasury holdings totaled $4.469 trillion, up $7.9 billion from the prior week
• Holdings of mortgage-backed securities (MBS) were $1.96 trillion in the week, down $15.7 billion from the prior week

Total Public Debt 

• Total public debt outstanding was $39.23 trillion as of June 5, an increase of 8.3% from the previous year
• Debt held by the public was $31.61 trillion, and intragovernmental holdings were $7.69 trillion

GDP

• The latest annualized U.S. GDP stands at $31.82 trillion as of March 31, 2026, an increase of 1.26% from the previous quarter, and an increase of 5.92% from the previous year
• The total public debt-to-GDP ratio is at 122.77% as of March 31, an increase of 2.23% from the previous year

Inflation Factors

CPI:

• The consumer-price index rose 3.8% in May year over year
• On a monthly basis, the CPI decreased 0.0% in May on a seasonally adjusted basis, after increasing 0.6% in April
• The index for all items less food and energy (core CPI) remained flat 0.0% in May, after rising 0.4% in April
• Core CPI increased 2.8% for the 12 months ending May

Food & Beverages:

• The food at home index increased 2.7% in May from the same month a year earlier, and stayed flat at 0.0% in May month over month
• The food away from home index increased 3.2% in May from the same month a year earlier, and stayed flat at 0.0% in May month over month

Commodities:

• The energy commodities index decreased 0.0% in May after increasing 5.6% in April
• The energy commodities index rose 31.8% over the last 12 months
• The energy services index fell 0.0% in May after increasing 0.9% in April
• The energy services index rose 4.5% over the last 12 months
• The gasoline index rose 29.3% over the last 12 months
• The fuel oil index rose 58.3% over the last 12 months
• The index for electricity rose 5.3% over the last 12 months
• The index for natural gas rose 3.3% over the last 12 months

Supply Chain:

• Drewry’s Composite World Container Index increased to $3,432.93 per 40ft container for the week of June 5
• Drewry’s Composite World Container Index has decreased by (2.7%) over the last 12 months

Housing Market:

• The shelter index decreased 0.0% in May after increasing 0.6% in April
• The rent index decreased 0.0% in May after increasing 0.6% in April
• The index for lodging away from home decreased 0.0% in May after increasing 4.0% in April

Federal Funds Rate

• The effective Federal Funds Rate is at 3.62%, down (0.02%) year to date

Middle East

• Iran struck Kuwait's international airport for the third time in a week — killing one person and injuring dozens — targeting an icon of Kuwait's post-war recovery just 48 hours after it fully reopened, as Tehran escalates tit-for-tat pressure against the U.S. blockade while nuclear negotiations remain stalled
• The attack exposed deepening fractures between the U.S. and its Gulf allies, with Kuwaiti officials privately voicing frustration that Washington got them into a war without consultation — raising fresh questions about the durability of U.S. security commitments in the region
• Spurred by the Iran war's effective closure of the Strait of Hormuz, Gulf petrostates are investing billions in alternative export infrastructure — Saudi Arabia is running its East-West pipeline at full capacity, the UAE is accelerating a second bypass pipeline by 2027, and Iraq is pursuing new overland corridors — in what analysts say will be one of the most durable structural outcomes of the conflict
• The infrastructure buildout is already redrawing the global energy map, with Saudi Red Sea exports surging from 2 million to 7 million barrels per day, while the UAE's exit from OPEC and accelerated pipeline expansion signals a direct challenge to Saudi Arabia's dominance as the region's swing producer

Europe

• Prominent voices within the Russian establishment — including former hawks and Kremlin-aligned analysts — are openly acknowledging that outright victory in Ukraine is no longer achievable, with one former Kremlin official warning the current course leads to "full-scale defeat," yet Putin responded by intensifying missile strikes on Kyiv, killing 22 civilians in one of the war's bloodiest barrages
• The internal fractures signal a regime caught between pragmatists who recognize the war's diminishing returns and an FSB-backed escalation faction pushing toward Baltic provocations — leaving the conflict in a dangerous limbo where elite disillusionment has not yet translated into any change in Putin's strategic calculus
• Eurozone household inflation expectations held steady at 4% for the next 12 months in April — well above pre-conflict levels — underpinning market expectations for the ECB to raise its key rate from 2.0% to 2.25% at its June 11 meeting
• Crucially, households expect income growth of just 0.8% over the coming year, down sharply from 2% in March — suggesting workers are absorbing the energy price shock rather than demanding compensatory wage increases, which limits second-round inflation risk but also points to a significant real-income squeeze across the bloc

China

• Huawei's announcement of the "Tau Law" — a chip-stacking technique it claims will match cutting-edge performance by 2031 — is less a breakthrough than an admission of constraint, with independent analysts noting TSMC will reach the same performance level in 2028 and surpass it by 2031, leaving a realistic technology gap of six to eight years rather than the three implied by Huawei's framing
• The underlying problem is structural: Huawei's chip factories produce usable output only ~20% of the time, and its own technical paper explicitly acknowledges it cannot breach the EUV lithography barrier — confirming that U.S. export controls are working, even as loopholes remain
• China's State Council approved sweeping new outbound investment rules effective July 1, giving Beijing authority to block cross-border deals involving AI and other critical technologies, force divestiture of unapproved investments, and restrict Chinese engineers from working overseas — effectively codifying a legal wall around its technology sector
• The rules follow Beijing's forced unwinding of Meta's $2.5 billion acquisition of AI startup Manus and its instruction to leading domestic AI firms not to accept U.S. funding without government approval — signaling that the surface-level warmth of the Trump-Xi summit has done little to slow China's structural decoupling from Western capital and talent flows

Columbia

• Far-right populist Abelardo de la Espriella — a criminal defense attorney who has represented paramilitary commanders and money launderers — captured 44% of the vote in Colombia's first-round presidential election, setting up a June 21 runoff against leftist Iván Cepeda that presents voters with the starkest ideological choice in the country's modern political history

India

• Google's $15 billion AI data center hub in water-stressed Visakhapatnam, India — backed by $2.3 billion in state subsidies and partnerships with Adani and Bharti Airtel — highlights the intensifying geopolitical race to anchor U.S. AI infrastructure in high-growth emerging markets, even as local displacement and resource competition spark growing backlash that could complicate future build-outs across the developing world

Africa

• The WHO declared a global health emergency over an Ebola outbreak in Congo and Uganda, with around 80 deaths and over 200 suspected cases recorded — including cases in both countries' capitals — involving the rare Bundibugyo strain for which no approved vaccine or treatment currently exists

Cuba

• CIA Director Ratcliffe made a rare visit to Havana to warn Cuban officials they have a limited window to engage with the Trump administration, as the island faces severe fuel shortages, widespread blackouts, and growing street protests

Australia

• Australia is permanently diversifying its oil imports beyond Middle East suppliers and accelerating its renewable energy transition, even as it secures emergency fuel reserves to buffer against the ongoing Strait of Hormuz disruption

Canada

• Canada approved Enbridge's ~$3 billion Westcoast pipeline expansion, adding 300 million cubic feet per day of capacity as part of PM Carney's push to reduce U.S. trade dependence and boost Asian energy exports

Italy

• Trump publicly broke with Italian PM Giorgia Meloni — once his closest European ally — after she refused to send forces to the Strait of Hormuz and called his attacks on Pope Leo "unacceptable," leaving her isolated on both sides of the Atlantic

Japan

• Japan will release an additional 20 days' worth of oil reserves in early May to stabilize energy prices, as the country relies on the Middle East for over 90% of its crude imports and the Strait of Hormuz remains largely blocked

New Zealand

• New Zealand plans to spend roughly $7 billion on its military, including enhanced strike capabilities and new helicopters, aiming to reverse military attrition by recruiting 2,500 personnel in the coming years

Venezuela

• A Colombian military C-130 carrying 128 people crashed shortly after takeoff in the southern jungle, killing 66, injuring dozens and prompting criticism over long-standing deficiencies in military aircraft and airport infrastructure

Oil Prices

• WTI: $90.36 per barrel
• +3.43% WoW; +20.61% YTD; +43.77% YoY
• Brent: $93.10 per barrel
• +1.14% WoW; +18.52% YTD; +42.49% YoY

US Production

• U.S. oil production amounted to 13.7 million bpd for the week ended May 29, down 0.0 million bpd from the prior week.

Rig Count

• The total number of oil rigs amounted to 563, up 1 from last week.

Inventories

Crude Oil

• Total U.S. crude oil inventories now amount to 433.7 million barrels, down (0.5%) YoY
• Refiners operated at a capacity utilization rate of 94.7% for the week, up from 94.5% in the prior week
• U.S. crude oil imports now amount to 5.212 million barrels per day, down 0.8% YoY

Gasoline

• Retail average regular gasoline prices amounted to $4.22 per gallon in the week of June 5, up 34.4% YoY
• Gasoline prices on the East Coast amounted to $4.25, up 37.7% YoY
• Gasoline prices in the Midwest amounted to $4.22, up 38.5% YoY
• Gasoline prices on the Gulf Coast amounted to $3.90, up 39.4% YoY
• Gasoline prices in the Rocky Mountain region amounted to $4.47, up 36.7% YoY
• Gasoline prices on the West Coast amounted to $5.63, up 29.7% YoY
• Motor gasoline inventories were up by 3.4 million barrels from the prior week
• Motor gasoline inventories amounted to 215.0 million barrels, down (5.8%) YoY
• Production of motor gasoline averaged 9.42 million bpd, up 4.3% YoY
• Demand for motor gasoline amounted to 8.594 million bpd, up 4.0% YoY

Distillates

• Distillate inventories decreased by 1.5 million in the week of June 5
• Total distillate inventories amounted to 102.3 million barrels, down (5.0%) YoY
• Distillate production averaged 5.180 million bpd, up 3.7% YoY
• Demand for distillates averaged 3.468 million bpd in the week, up 10.1% YoY

Natural Gas

• Natural gas inventories increased by 95 billion cubic feet last week
• Total natural gas inventories now amount to 2,578 billion cubic feet, down (0.8%) YoY

High-yield:

High yield bond yields increased 1bps to 7.11% and spreads tightened 2bps to 303bps. Leveraged loan yields decreased 1bps to 8.74% and spreads decreased 3bps to 484bps. WTD high yield bond returns were positive 3bps. WTD leveraged loan returns were positive 10bps. 10yr treasury yields increased 3bps to 4.48%. HY and LL spreads tightened, supported by strong labor market data, steady inflows, and shifting Fed expectations, with recent payroll and unemployment figures reinforcing the likelihood of a rate hike by YE2026.

Week ended 06/05/2026

Yields & Spreads¹

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (trading in excess of 1,000 bps)²

Total HY Defaults

Leveraged loans:

Week ended 06/05/2026

Yields & Spreads¹

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (loan price below $80)¹

Total Leveraged Loan Defaults

Default activity: 

• Most recent defaults include: QVC Group ($2.2bn, 4/16/2026), Cumulus Media ($641mn, 03/05/2026), Trinseo ($390mn, 02/17/2026), Beasley Broadcasting Group ($189mn, 02/01/2026), Nine Energy Service ($300mn, 02/01/2026), Multi-Color ($4.5bn, 01/29/2026), Pretium Packaging ($201mn, 01/28/2026), Saks Global Enterprises ($2.7bn, 12/30/2025), and United Site Services ($2.6bn, 11/30/2025).

CLOs: 

Week ended 06/05/2026

New U.S. CLO Issuance²

New U.S. CLO YTD 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

Diagram B: High Yield and Leveraged Loan LTM Price  

Diagram C: Leveraged Loan and High Yield Returns 

Diagram J: New Issue - Leveraged Loan and High Yield

Diagram K: Leveraged Loan + HY Defaults by Sector – LTM 

Diagram L: CLO Economics 

Diagram M: Developed Country Govt. Bond Yields (%)

Diagram N: S&P 500 Historical Multiples

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

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

Diagram Q: Dry Powder for All Private Equity Buyouts ($B)

Diagram R: Dry Powder for All US Debt ($B)

Diagram S: Structured Credit Spreads

Diagram T: Structured Credit Yield

Diagram U: SOFR Curve

Diagram V: CMBS Spreads