Best of the Bond Market for May 15th, 2012
Investment News: PIMCO ETF Beats the Total Return Fund by 3% since March Launch (h/t @abnormalreturns) – Since the Pimco Total Return ETF (BOND) was launched on March 1, it has had a return of 4.14%, while the mutual fund version has had a return of 1.17%. The secret to the ETF’s success is simple. At a little over $800 million, the ETF is free to invest in Mr. Gross’ best ideas — and only those — while the mutual fund, with $258 billion in assets, is forced to invest more broadly. Learn more about the PIMCO BOND ETF here.
Marketwatch: Treasurys turn up; 5-year yields near record lows – Yields on 5-year notes fell 2 basis points to 0.73%, after touching 0.70%. Their lowest closing level, set in late January, was 0.71%…Yields on 10-year notes were little changed at 1.77%.. not much above their all-time low of 1.71%….Thirty-year bond yields turned down 1 basis point to 2.92%.
The Sacramento Bee: Optimistic projections led to dramatic surge in California budget deficit (h/t @munilass) - “There’s nothing wrong with the economy,” said Chris Thornberg of Beacon Economics. “The problem here is the process. Simple as that.”
WSJ: Treasury Yields Near Historic Lows, And Still Attractive, BMO Says – “Treasurys are still cheap, and in a capital-preservation trade that means Treasury yield could still go lower,” says Scott Graham at BMO.
The Financial Lexicon: 5 Brand New Bonds Yielding Over 4% – First, the good news: Believe it or not, there are actually non-financial companies still issuing investment grade debt with yields of 4.39% or greater. Now, the bad news: I’m referring to 30-year bonds. Companies are KR, TAP, WLP, AET, and LOW.
Forbes: Why There’s a Growing Attraction to Muni Bonds - 1. Lack of Supply 2. Potential for Higher Taxes Following Fall U.S. Presidential Election 3. Aftermath of Muni Bond Fund Outflows following Meredith Whitney’s Default Prediction
Bloomberg: San Antonio Voters Pass Record $596 Million in Bonds – In five separate items….The largest amount, $337.4 million, will cover roadwork. Approval margins ranged from 62 to 73 percent, according to a municipal website.
Market Watch: CUSIP ID Requests Project Active Bond Issuance in Muni Markets, Continued Slowdown in International Markets – CUSIP Global Services (CGS) today announced the release of its CUSIP Issuance Trends Report for April 2012. The report, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity, suggests continued strength in US debt issuance, with dramatically heightened activity in municipal bonds, over the next 30-90 days.
FT: How are Greece’s “New Bonds” Doing? – not too well. See the charts in the article.
Dr. Duru: The Bottom Drops Out Of ProShares UltraShort 20+ Year Treasury And Bearish Signs Increase – TBT is breaking down, and iShares Barclays 20+ Year Treasury Bond (TLT) is breaking out. Charts included.