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Reuters: – Bernanke points to reduced Fed bond buying this year. – Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank expects to slow the pace of its bond purchases later this year and bring them to a halt around mid-2014, comments that weighed on stocks and pushed bond yields to a 15-month high.
CNBC: – Gundlach: Bet on a ‘Most Hated Asset’. – DoubleLine Capital’s Jeff Gundlach told CNBC on Wednesday to expect a rally in bonds very soon.
Motley Fool: – Should long-term investors go for dividends or blue-chip bonds? – Given the recent boost in bond yields, let’s compare dividend yields to bond yields for the 30 companies in the Dow Jones Industrial Average.
Learn Bonds: – The Vanguard total bond market index fund (BND) rating report. – If you wanted to own one bond fund to gain the benefits of diversifying beyond stocks, we recommend the Vanguard Total Bond Market Index Fund (BND). This super-low fee fund (0.10% annual expense ratio) will mirror the performance of the US investment grade bond market.
Anthony Valeri: – Time to get short – This weeks bond market perspectives. – In our view, intermediate-term bonds may provide the best combination of both return and protection. While the low-return environment is likely to persist, we do not believe the recent rise in bond yields is the start of a new bear market for bond investors. The now slightly higher yield range is the more likely outcome.
James Kostohryz: – The Fed is between a bubble and a hard place. – For over almost five years, the Fed has engaged in an experimental policy of quantitative monetary easing that has been unprecedented in scale. Now, the Fed is faced with the daunting task of engineering a climb-down of the US financial system and economy from atop the dizzying heights of a towering mountain of excess liquidity. This is not going to be easy, at all.
Fox Business: – Does detroit recovery plan threaten muni market? – FBN’s Charlie Gasparino breaks down how Detroit’s recovery plan could impact the muni-bond market.
Business Insider: Here are the warning signs that preceded the last 3 bond market crashes. – Everyone should keep an eye out for the warning signals which preceded the last three crashes. Here’s what you should be looking out for.
Benzinga: – This EM bond ETF’s luck can’t get any worse, can it? – Investors might begin to wonder when EMHY might tumble as over 40 percent of the weight of this fund is invested in Turkey, Venezuela and the Philippines, each of which has had a string of issues to contend with of late. Common sense and simple math dictate that bad news cannot keep mounting in those countries without leading to, at best, outflows for EMHY, and at worst, share price retrenchment.
Investorplace: – Are muni bond ETFs worth the risks? – Detroit declared last week that it will be unable to make payments on a portion of its debt, and has asked bondholders to be repaid less than 10 cents on the dollar. In addition, the recent rise in interest rates has caught many fixed-income holders off guard as the price of their bonds has receded. So is it time to throw in the towel on muni bonds, or should investors ride out the volatility?
WSJ Money Beat: – It’s not about the Fed anymore for some EM bonds. – Emerging-market local currency bonds aren’t necessarily going to tank if the Federal Reserve tapers its stimulus program Natixis says.
WSJ: – Bond investors head for the hills. – Signs of a stronger U.S. economy are rippling through the bond markets, sending investors and corporate leaders racing to prepare for higher interest rates.
Financial Post: – Money pours into high-yield debt markets in early 2013. – As equity markets remain relatively weak, Canadians are pouring investing dollars into high-yield products, sending debt markets soaring.
Reuters: – Rhode Island on track to make payment on 38 Studios bonds. – Rhode Island remains on track to make a $2.5 million interest payment next year on bonds that were used to finance the facilities of 38 Studios, a now-bankrupt video game company founded by former Boston Red Sox pitcher Curt Schilling.
Fund Web: – The risky pursuit of high-yield income. – Bond assets continue to be mopped up by yield hungry investors as soon as they hit the market. However the problem is that those hunting for income above inflation are being pushed further and further up the risk spectrum.
Market Oracle: – U.S. Treasury bond bubble red alert, QE taper talk puts bonds at risk. – Where to hide? – Induced by “taper talk,” volatility in the bond market has been surging of late. Is there a bond bubble? Is it bursting? And if so, what are investors to do, as complacency might be financially hazardous.
Financial News: – Green bonds win new fans and investors. – Green bond fans point to Massachusetts as a prime example of a boost in investor appetite for bonds once deemed risky and experimental. The US state had to scale back a $1.1bn bond by about 40% on June 4 as investors backed away but its $100m “green” tranche was a third oversubscribed and issued without a hitch. A small tranche, but a small victory for green bond advocates.
Bullionvault: – Corporate Bonds: What a mess! – It is impossible to justify the high price of junk bonds (and their correspondingly low yields). You must remember that the default rate on these bonds will soar, sooner or later. In March 2009, the default rate on this category of debt hit 14.9%. And of course, default rates rise when more bonds are issued. Issuance hit an all-time record in 2012. Through the beginning of May, the high-yield sector was on pace to beat that record this year.
Interactive Investor: – Bonds at a tipping point. – Volatility in government bond markets has risen sharply following Federal Reserve chairman Ben Bernanke’s May testimony to Congress. Having fallen as low as 1.6% shortly before Bernanke spoke, 10-year US government bond yields are now trading at around 2.2%, levels not seen since the first half of 2012.
Via @blackrock Many bonds mature in June & July, making these strong months for reinvestment. This should strengthen demand in the near term
— Cate Long (@cate_long) June 19, 2013