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WSJ: – Fed officials offer split views on outlook for bond-buying. – Several Federal Reserve officials on Thursday agreed that the government’s troubled financial situation was hurting the economy, although finding that common ground did not lead them to concur on the best way forward for monetary policy.
InvestorPlace. – Don’t chase bond safety with more risk. – At this point, everyone probably has some level of concern about when they should jump off this runaway stock train — especially those who are getting closer to retirement. As far as where you should put that money, I would strongly suggest bonds, and more specifically, individual bonds over bond funds. While it might take a little more time and effort on the research and management fronts, you can get a better grip on your risks and more easily understand your rewards.
Market Oracle: – Warning US Treasury bond bull market may be over. – Bond prices have soared and yields collapsed. To give you some idea: near the end of July 2012, 30-year U.S. bonds had a yield of less than 2.5%. Prior to the financial crisis, these same U.S. bonds provided investors with a yield above 4.5%. That was the past. Now, the effects of the financial crisis are going away: the U.S. economy actually seems to be improving, the financial system is in better health, and the employment situation appears much better. With all these changes occurring in the U.S. economy, investors are asking whether the U.S. bonds market is still a safe place to be.
Learn Bonds: – Be a smart investment news consumer. – Reading, watching, and listening to investment news well, or any news well, is not nearly as easy as the vast majority of people perceive it to be. The news is a mine field, the mines are disinformation and misinformation, and there are a lot of mines in the field. The mines are due to various personal motivations, biases, and errors. Below are some guidelines for being a smart consumer of investment news.
MarketWatch: – Junk bond protections for investors eroding. – A key indicator of investor protections for holders of junk bonds remained near record lows in April, indicating that the quality of financial tripwires alerting investors to financial stress in their securities continues to erode.
ETF Daily News: – Who will buy our bonds when the government stops. – Right now, the Federal Reserve is purchasing $45.0 billion worth of government bonds, but at the same time, it’s debating if its quantitative easing program should soon end. If the Fed does stop funding the U.S. government, a major buyer of U.S. bonds will be exiting the market. I wonder who will buy our bonds then.
FT: – Phony QE peace masks rising risk of instability. Are the markets going mad? – That is a question many investors might have asked in recent weeks, as stocks in the UK, eurozone and US have soared – even as bond spreads decline.
ETF Trends: – How ‘Frothy’ are high-yield bond ETFs? – High-yield corporate bond ETFs are bouncing back after a rare three-day sell-off. Some investors are worried junk bond ETFs are overheated after such a strong run but they have endured the recent bump higher in Treasury yields quite well.
Alpha VN Research: – Treasury yields rising makes mockery of QE exit talk. – if The Fed’s bond buying and subsequent credit creation is accelerating month to month, then isn’t it curious that bond yields are rising?
What Investment: – High yield: The reckoning will come, but not yet. – Stefan Isaacs, manager of the £1.4 billion M&G High Yield Corporate Bond fund, has acknowledged that the high-yield party cannot last forever but argued that the music can keep playing for a while yet.
Reuters: – Fed hawks push for move away from housing-linked stimulus. – A trio of hawkish regional Federal Reserve officials are calling for the U.S. central bank to stop buying mortgage-backed bonds, citing recent improvement in the housing market.
Forbes: – Barclays’ Favorite foreign corporate bonds. – Like many Main Street investors, most retirees are not looking for the capital gains pop on a bond, or in a bond fund. They’re not trying to time the market and buy at 88 and sell it at 108. They want the coupon payments. They want their $200,000 to earn 5% a year so they can count on that $10,000 extra income (before it compounds and goes up year over year). Where does a guy like that go for returns today?
ETF Database: – Where does your international government bond ETF really invest? – While most investors have gradually eased their “home country bias” on the equity side of their portfolios, many have limited their holdings of international government bonds. This quickly expanding niche market can be a strong part of any portfolio, given careful consideration before investing. While these products offer the potential for uncorrelated returns and attractive yields, it is important to take a close look at the portfolio compositions, which sometimes reveal information that investors should pay attention to.
WSJ: – Yield grab drives corporate-bond records. – Records are falling fast in the corporate-bond market. After Apple’s $17 billion blowout deal at the end of April, Brazilian oil company Petroleo Brasileiro this week sold $11 billion of bonds, the biggest emerging-market debt sale in history. Meanwhile in Europe, Spanish companies like Repsol, Telefonica and Red Electrica are paying the lowest cost to issue bonds since the introduction of the euro. All of these records are the result of a single powerful force: the reach for yield.
Barron’s: – Watch junk bonds for clues about stocks. – Nicholas Leach, vice president of global fixed income at CIBC Global Asset Management says there’s still a lot of value in the high-yield market and sees opportunities across a range of sectors, especially the North American automobile industry.
WSJ: – Corporate debt remains easy favorite among treasurers. – Companies boosted the share of their cash balances invested in corporate debt in April as concerns about safety are increasingly being trumped by a desire to boost returns on investment.
Detroit recover plan, "negative for bondholders" & indicates "city requires 'significant and fundamental debt relief,'" says Moody's.
— Tom Kozlik (@tomkozlik) May 16, 2013
Although still a very expensive valuation on long-term basis, 10yr Treasury real yield highest since Mar 2012 & provides short-term support
— Anthony Valeri (@Anthony_Valeri) May 16, 2013