This Week’s Top Bond Market Stories – July 13th Edition

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 Learn Bonds: – You can predict market direction. – Despite what a lot of people write and say, you can successfully predict the direction―either up or down―of interest rates, stock market indexes, the price of gold, etc. You cannot predict what will definitely happen, but you can predict what is more likely or, even, what is very likely to happen.

Learn Bonds: – Why are Lending Club yields starting to head down? – Lending Club is the leader in the peer-to-peer lending space, where individual borrowers can ask “strangers” to fund loans. Ironically, there are plenty of “strangers” willing to lend money. Lending Club is having trouble with with getting more borrowers.

Learn Bonds: – An opportunity to capture high yields from this copper company. – Financial Lexicon takes a closer look at Southern Copper Corporation bonds.

Learn Bonds: – Searching for yield? Check out this 6.55% coupon corporate bond. – McGraw Hill Financial is a financial markets content and analytics company and parent to recognizable brands such as Standard & Poor’s Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, and J.D. Power. If you are looking for a long-term investment.

Learn Bonds: – How EMC’s new bonds stack up. – EMC Corp. recently issued new bonds, announced a share buyback and a dividend. The new EMC bonds due in 2023 yield  3.64%, larger blocks have gone for as low as $96.99 recently, with a 3.74% yield. Note bond prices have risen and fallen dramatically in the past 6 months. Now let’s take a look at how the new EMC bonds stack up.

WSJ: – Big bond managers post quarterly losses. – A sudden surge in U.S. interest rates has dimmed the luster of some of the bond world’s brightest stars. Bill Gross, Dan Fuss, Jeffrey Gundlach and Michael Hasenstab were among portfolio managers whose funds posted losses during the second quarter.

MarketWatch: – The junk bond market ‘hasn’t come down to earth’ – High-yield bond guru Marty Fridson still thinks his sector is overpriced. The rigorous researcher of junk bonds said as much to a cohort of high-yield research analysts from hedge funds, banks, and asset managers during the New York Society of Security Analysts’ 23rd Annual High Yield Bond Conference.

iStockAnalyst: – Bond yields gone wild? – With the Federal Reserve’s intention to taper its easing, yields have risen quickly, causing municipal bonds to experience their worst decline since September 2008. In the second quarter, the Barclays Capital Municipal Bond Index lost nearly 3 percent, with the long end of the yield curve receiving the biggest blow, as bonds maturing in 20 years fell more than 4 percent. We view this swift shift as a buying opportunity, as yields seemed to have moved too far, too fast, says Portfolio Manager John Derrick.

MoneyBeat:  – Investors can run, but they can’t hide. – People looking for safe, simple investments generating regular income are facing an ugly reality: There aren’t any. Investors can run, but they can’t hide.

IndexUniverse: – Bond mutual funds: Worse than bond ETFs. – There’s been a lot of talk recently about the fact that bond ETFs can trade to large discounts during periods of market distress. All the stories beg a deeper, more detailed discussion.

IndexUniverse: – PIMCO’s BOND Asset-losing streak continues apace. – The Pimco Total Return ETF (NYSEArca: BOND) has continued to see steady net asset outflows since the fund broke its impressive asset-gathering streak with its first monthly redemptions ever in May.

WSJ: – Investors yank money from municipal-bond funds. – Investors yanked $13.5 billion from mutual funds that invest in municipal bonds in June, according to Lipper FMI, a retreat that is making it harder for several cities, states and towns to raise money.

ETF Trends: – Bank loan or junk bond ETFs for yield? – Investors dumped speculative grade debt-related exchange traded funds and turned to senior loan and floating rate notes as interest rates inched higher in the last few months. However, the sell-off may be overdone and now junk bonds show attractive valuations, according to BlackRock.

Reuters: – Old normal for bonds rather than fragile new world. – The global bond market shock of recent weeks may be closer to an ‘old normal’ than some new world of fragile, over-regulated markets posited by many banks and brokers to explain the rout.

FT: – Fire drill reveals bond fund exit weakness. – Bond investors fear some markets will not cope when real trouble hits, leading to big price falls.

MoneyBeat: – Bond trading rises with volatility. – As a spike in interest rates fanned volatility in recent months, the amount of corporate debt changing hands increased, according to research by J.P. Morgan Chase & Co.

Business Insider: – It’s a good thing that the bond gods at PIMCO have been getting slammed. – The flagship Total Return Fund had its worst month since 2008. Outflows from the fund hit a record in June. This can’t be any fun for the folks at PIMCO, but actually it’s a sign that PIMCO is doing its job, and giving its investors bond exposure.

Institutional Investor: – Who’s buying now? Some long term investors are snapping up bonds. – Higher rates are improving funding positions of pension plans and encouraging funds to buy bonds for liability matching.

Bloomberg: – Crowded ETF exit proving costly as bonds trail. – Investors who sought exchange-traded funds as a faster way to trade corporate bonds are finding that they can be as expensive to trade as the underlying debt.

WSJ: – Short looks beautiful to bond investors. – As interest rates spiked in the second quarter, many investors in exchange-traded funds changed horses: from intermediate or long-term bonds to bonds with shorter maturities.

 

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