To get the Best of the Bond Market delivered to your email daily click here.
WSJ: – Apple to sell $17 billion in bonds. – Apple is selling $17 billion of bonds Tuesday, a record amount for a U.S. investment-grade offering, according to investors familiar with the deal. The offering generated more than $50 billion in new orders, people familiar with the offering said.
Money Beat: – Stocks, bonds go their own way. –The pairing, of soaring stock prices and falling Treasury yields, is one incongruity that investors have grown accustomed to in recent years, thanks to the Federal Reserve’s unprecedented money printing efforts. But even so, the current disconnect is starting to strain credulity.
Index Universe: – 3 signs we’re exceeding our ETF yield reach. – With bonds yielding so little, the income portion of many portfolios has been the first to suffer. To compensate, investors have reached out to less traditional sources of portfolio income, including derivative strategy ETFs and MLP ETFs, but have we gone too far?
Learn Bonds: – From junk to Aa1 – Apple gets a new credit rating. – On February 25, 1997, Moody’s downgraded Apple Computer’s long-term senior unsecured debt to B3. In just over one year, Apple Computer’s rating had fallen from Baa2, an investment grade rating, deep into junk territory. My oh my, how far we’ve come since then.
FT Adviser: – Bonds outperform equities in past decade. – The current economic and market conditions provide high yield investors with plenty of opportunities to continue to deliver good performance. High yield is an asset class that generally performs well in the early stages of an economic recovery, and although there is no guarantee it will continue, data on both sides of the Atlantic improved towards the end of 2012.
WSJ: – Treasury to pay down debt for first time in six years. – The federal government said Monday it would pay down a small portion of the national debt this quarter for the first time in six years. The debt reduction, seen as temporary, is a sign that higher tax receipts and spending cuts are improving Washington’s finances.
Investment News: – MEREDITH WHITNEY: Something’s Gotta give as muni bonds enter a ‘negative feedback loop from hell’. – Meredith Whitney still isn’t backing down on the level of risk she sees in the muni market. “This is just the beginning, and this stuff will take a long time to play out,” she said. “This is not fun stuff to talk about; the fun stuff to talk about is all the good stuff that governors are doing around the country.”
Barron’s: – Early signs of spring thaw for munis. – Municipal bonds have almost completed their usual dreary slog through March and April, and things are starting to look sunnier ahead. Muni mutual funds and exchange-traded funds have recorded eight straight weeks of net outflows, but those outflows slowed significantly last week.
Business Insider: – Why investor demand for Apple’s bonds is out of this world. – Apple is in the process of floating the largest-ever non-financial corporate bond offerings, as it raises somewhere around $15 billion in order to fund dividends and buybacks. According to reports demand for the bonds is insane. Demand is far outstripping supply. How come?
About.com: – Barron’s big money poll: Everyone hates bonds. – Twice a year, Barron’s polls top money managers to learn their opinions regarding the future direction of the financial markets. The most recent poll, published Saturday, reveals some telling statistics about the bond market. Barron’s posed the question, “Are you bullish or bearish about the following asset classes in the next six to 12 months?” A full 89% of respondents expressed a bearish (negative) view on bonds, with only 11% bullish (positive).
WSJ: – Ten-year Treasury yield hits new 2013 low. – Treasury prices floated around session highs as fund managers stock up on safer assets to close out the month and investors express lingering concerns about global growth.
FT: – High risks of European hybrid bonds outweigh high yield. – In the few years before the financial crisis the market for complex and heavily financially engineered debt instruments burned hot and bright. For one category at least this year has been even better.
Reuters: – Global investors cut stocks and bonds, boost cash. – Global investors cut back on stocks and bonds in April, lifting cash levels to a seven-month high, on signs the world economy may be heading for softer growth, Reuters polls showed.
FT: – Scarcity value of EM bonds drives prices. – The fight among investors for emerging markets bonds is set to get even fiercer. After a bumper 2012, developing countries have scaled back on sales of new government debt this year, raising fears that the scarcity premium that fund managers are already paying to hold emerging markets bonds could rise higher still.
ETF Trends: – Where ETFs and mutual funds diverge. – Exchange traded funds have experienced inflows over the past year, while the mutual fund industry has experienced significant outflows. The ETF business has gathered over $1 trillion in assets under management, and for good reason.
Morningstar: – Don’t get carried away with floating-rate funds. – Question: A friend recommended I look into floating-rate funds for my fixed-income portfolio to protect against a rise in interest rates. How do these funds work, and how do I know if they’re right for me?
Barron’s: – Apple bonds will take aim at Microsoft yield benchmarks. – The bond market is in a tizzy today about the potential size of Apple‘s bond offering (hint: think really big), and what type of yields the bonds could command (hint: think really low).
Forbes: – With all of Apple’s cash, why is it issuing bonds? – Apple has a cash pile larger than the total valuations of most other companies. Yet it is issuing bonds so as to borrow yet more money. Why?