Week Ending: May 1, 2026

Tech Resilience

In recognition of Tax Day this week in the U.S., we tracked the daily individual tax refund data released by the U.S. Treasury. Inflationistas are quick to note that year-to-date tax refunds to households are 18% higher than at the same time last year, stoking concerns that the so-called fiscal boost will reignite inflation. But context matters. When compared with other types of household income, year-to-date tax refunds of $246 billion are less than one week of aggregate U.S. consumer income from wages and salaries, which averaged over $1 trillion per month in 2026. Further, tax refunds during the 2021 fiscal boost, which led to the subsequent spike in inflation, had already exceeded $600 billion by April 2021, while the total government stimulus to households ended the year at $4.5 trillion, equivalent to over four months of wage income. So, while refunds are worth watching as they provide the most current government transfer data, historical context suggests they are far from the scale of a fiscal boost that would meaningfully fuel inflation.

Highlights of the Week:

High Yield: April saw several new deals issued to finance data center construction. Data centers are a growing share of the high yield universe, surpassing 2% of the index this year. Active investors should carefully parse fundamentals across the expanding universe of issuers as they seek to identify relative-value opportunities in this segment of the market.

Corporates: It was a busy week for the investment-grade (IG) new issue market, with $56 billion pricing, led by Meta Platforms’ $25 billion deal, tying for the ninth-largest IG deal ever. Heavy supply was met with strong investor demand, and IG spreads were unchanged for the week, closing at an option-adjusted spread of 78 basis points as of Thursday’s close.

Municipals: For the week ending April 29th, LSEG Lipper reported $615 million in inflows into municipal funds, led by ETFs at $492 million and open-end funds at $123 million. Flows moderated from last week’s $1 billion rebound, consistent with the current rates backdrop. Momentum remains strong, with 21 of the past 23 weeks recording inflows. Year-to-date inflows now total $29.5 billion, the third-highest level on record.

Equities: The U.S. equity market ended the week higher, navigating an event-driven backdrop shaped by earnings releases, the Federal Reserve’s policy decision, key economic data, and ongoing geopolitical tensions. Most sectors posted gains, with communications, energy, and utilities leading the market higher, while materials, technology, and industrials lagged.

Securitized Products: Geopolitical uncertainty and higher oil prices led to modest widening in broader credit markets, but European securitized products remained resilient, with spreads generally stable or slightly tighter. Asset-backed security activity was subdued due to limited supply, though demand stayed strong, supporting firm execution. The primary pipeline, particularly in autos, continued to build. In collateralized loan obligations (CLOs), technicals remained supportive given strong investor demand.