Best of the Bond Market for July 31st, 2012
PIMCO: Bill Gross’ monthly investment outlook is out – an investor should continue to expect an attempted inflationary solution in almost all developed economies over the next few years and even decades.
WSJ: Regulators probe municipal bond market index for LIBOR type issues – Several municipal-debt-market participants have already complained that the industry’s benchmark is set with little transparency. The scope of the SEC’s investigation is unclear, but an SEC enforcement official questioned Thomson Reuters officials late last year as part of the agency’s broad look at municipal-bond disclosure and pricing information.
Learn Bonds: What the TLT chart is telling bond traders – The TLT could fall a lot further from its current level before finding support from buyers in the market, at least from looking at the charts only. Even if the TLT does fall dramatically from here, until it breaks through the 123.26 support level, the uptrend we have been in still very intact.
All Star Charts: Interest rates are at a key inflection point - 3 interesting charts make the case.
ETF Trends: Fallen angel bond ETF sports 6% yield – The Market Vectors Fallen Angel High Yield Bond ETF (ANGL) tries to reflect the performance of the BofA Merrill Lynch U.S. Fallen Angel high Yield Index, which holds below investment grade corporate debt that were rated investment grade at the time of issuance.
NY Times: SEC urges municipal bond market reforms – The report devotes most of its attention to the relative lack of information that is available to investors about the municipal bonds they are buying. This has made it easier for financial firms to charge big markups when investors buy and sell the bonds, according to the report.
Bond Squawk: More traders expecting the 10 year treasury at 1% than 2%. - results of their recent poll on where traders expect the 10 year to trade over the next 12 months.
Businessweek: Bond gains accelerate in busiest July since 2009. – Gains of 2.23 percent in July on debt from the neediest to the most creditworthy borrowers are the most since 2.38 percent in January, Bank of America Merrill Lynch index data show. A $7.5 billion offering from Anheuser-Busch InBev NV (ABI), the world’s largest brewer, led $277.8 billion of issuance since the end of June as yields on investment-grade debt touched unprecedented lows.
Investment News: Why muni’s are still attractive – If the spread between AAA and BBB muni’s narrows to historical norm investors could potentially realize 82 bps of performance in addition to the 3.66% YTD total return delivered by the Barclays Municipal Bond Index as of the end of June.
Rick Ferri: Pick your muni fund carefully – The odds are low when trying to select an actively managed fund that will beat an index fund and the meager outperformance relative to high underperformance doesn’t make it a fair game. That bet is not worth the risk.
Business Insider: Unilever and Texas instruments just issued debt at the lowest rates in history. - Unilever, the large European food conglomerate, just sold $550 million worth of 5-year notes with a coupon of just 0.85 percent. Texas Instrument has broken a record for the lowest coupon on 3-year debt at just 0.45 percent.
— Chris Heffernan (@SumRidgeTrading) July 31, 2012
My read of UST market for FOMC decision: 30% QE3 10% guidance extension and 5% IOER cut.
— Ed Bradford (@Fullcarry) July 31, 2012
— Cate Long (@cate_long) July 31, 2012
Gross: For past 30 years, money has worked hard for you. Now you need to work hard for the money. Donna Summer is smiling!
— PIMCO (@PIMCO) July 31, 2012
#Germany 2 year note yield falls to record -0.097%
— Linda Yueh (@lindayueh) July 31, 2012