JPM JPM Daily Credit Strategy 1

Nathaniel Rosenbaum, CFA AC ( Pavan D Talreja, CFA ( North America Credit Research JPMORGAN J.P. Morgan Securities LLC J.P. Morgan Securities LLC 24 July 2026 Silvi Mantri ( J.P. Morgan Securities LLC

JPM Daily Credit Strategy Update An update on hyperscaler performance and a look at Datacenter ABS credit metrics; HG inflows fall to a 3m low If you find our daily research helpful to your investment process, we kindly ask that you take the time to reflect this in the Extel survey which is now open. We would appreciate your consideration in the USA-Investment Grade Strategy category.

A quick update on hyperscalers and datacenters: Our hyperscaler index hit new wides of 145bp yesterday post Alphabet earnings, with the GOOGL complex 6bp wider and similar moves from META (+5bp) and MSFT (+4bp) vs relative outperformance from AMZN (+3.5bp) and ORCL (+3bp). We note that GOOGL average spreads of 88bp is still 2bp inside our JULI ex-hyperscaler index (90bp vs 93bp for JULI; e.g. hyperscalers are worth 3bp of spread at the index level) despite being 22bp wider YTD. At this stage, our hyperscaler index is 41bp wider YTD vs JULI ex-hyperscaler just 2bp wider.

With all of the focus still on hyperscalers and datacenters, we think there is value in looking for additional information from other markets. Along these lines, the JPM US Asset Backed Securities Research team recently published their Commercial ABS Surveillance tracker to monitor key performance metrics and triggers across commercial ABS sectors, including data centers and fiber (we note QTS Datacenters are 2 of the 21 datacenters featured in this report). The tracker uses trust level data across ABS programs for these assets to monitor debt service coverage ratios and leverage ratios across for the programs. From a corporate investor standpoint, ABS trust performance can be important because in the event that any ABS triggers trip, the issuer loses any excess cashflow as it gets trapped in the ABS trust, and potentially also loses access to the ABS funding market in the future, at least at reasonable spreads. Moreover, the performance data can be useful for corporate investors to monitor overall cash flows generated from an ABS issuers data center master trust on a monthly basis, and use it as a proxy to identify idiosyncratic sponsor risks or systematic sector trends. For more information such as the trigger calculations etc, kindly refer to the team's weekly from earlier today.

Fund Flows: HG fund flows moderated to +$5.2bn of inflows (-21% WoW), well below the 4-week average of +$8.7bn and the lowest since the end of April. The slowdown was led by both ETFs and Mutual Funds, where ETF inflows declined 23% WoW to +$3.6bn, and Mutual Fund inflows also fell 14% WoW to +$1.6bn. This is logical in light of MTD total return -1.6% so far, on track for the 2nd worst month YTD (March -2.1%). Recall there was a single week of outflows in early April (-$1bn) after which flows bounced back post initial cease-fire. Overall, our estimate of flows into HG corporate bonds across the fund complex moderated to +$2.1bn (-18% WoW). Across HG sub-categories, the slowdown was concentrated in Aggregate funds where inflows fell 30% WoW to +$3.4bn, primarily led by a drop in inflows into the intermediate bucket to +$2.2bn (-41% WoW). Corp-only inflows declined modestly to +$948mn, less than half the 4-week average of +$2bn inflows, as both intermediate inflows (+$419mn, -27% WoW) and short-end inflows (+$403mn, -14% WoW) slowed. Total Return inflows rose 45% WoW to + $836mn.

As an aside, we are aware of the headline on Bloomberg that based on Lipper data there was a $7.1bn outflow from HG this week. We believe this may be an error as there was a relatively large ($8.9bn) transfer this week from an existing fund to a new similar fund within the same fund manager. To the extent the Lipper dataset does not currently contain the new fund, this may explain the discrepancy in reported flows (vs. our dataset is from EPFR).

Within other asset classes, HY inflows slowed to just $47mn (-19% WoW), while Leveraged Loan inflows improved to $646mn (+41% WoW). Munis inflows dropped by 86% WoW to $262mn, the lowest…