To get the Best of the Bond Market delivered to your email daily click here.
WSJ: – Pimco’s Gross turns positive on 10-year treasurys. – Bond market heavyweight Bill Gross has again warmed up to longer-dated Treasury bonds after snubbing the securities for months, the latest sign of how the Bank of Japan’s 8301.JA -5.21% bold monetary stimulus is causing global investors to change course.
Fortune: J.C. Penney’s most discounted item: Its bonds – The retailer’s bonds are trading at around 70 cents on the dollar, suggesting investors think it could be headed for bankruptcy. But the value of its real estate alone is higher than all of its debt.
WSJ: – Regulators are concerned about municipal-bond deals. – U.S. regulators are probing whether securities firms are circumventing rules implemented in the wake of the financial crisis to protect municipalities against potentially biased investment advice, according to people familiar with regulators’ efforts.
Learn Bonds: – Want positive real returns? Brazil tops PIMCO index. – PIMCO doesn’t publicize it, but they have several bond market indexes. One index tracks global inflation linked bonds. Most investors are familiar with the TIPS, the US Treasury’s inflation linked bond offering. Many governments offer inflation linked bonds. The yields on these bonds are different from one country to another, as each country has different interest rates and rates of inflation. The yield on an inflation linked bond is very revealing, as it indicates what the market thinks the return will be on a normal bond (fixed coupon payments) after deducting for inflation.
ETF Trends: – A case for emerging market debt ETFs. – Emerging market stocks have become a standard part of most sophisticated investors’ portfolios, but emerging market fixed income investments have been much less common. But as these countries’ economic, currency, and market characteristics strengthen, investors may benefit from local-currency exposure to emerging market debt.
About.com: – The newest bond ETFs. – Even with over 220 bond ETFs already available to investors, fund providers are still finding new ways to slice and dice the fixed income universe. Below is a brief review of the new bond ETFs to come to the market. This article will be updated with the launch of each new bond ETF.
ETF Daily News: – The outlook for short term bond ETFs. – There has been a fair amount of discussion and debate in the recent past about the possibility of a great rotation from bonds to stocks as a catalyst that drove equity prices higher. And now that we are trending or breaking all time highs in stocks, things are a bit clearer.
FT: – US corporate debt activity at new low. – Activity in the US corporate bond market has plunged to a new low, raising questions over its ability to absorb any change in investor sentiment after several years of strong performance.
WSJ: – Bond investors rotate, but still court risks. – The highly anticipated “great rotation” from bonds into stocks has yet to be seen. Instead, investors are choosing to shift more money around within different types of bond funds.
Barron’s: – Munis play catch-up with Treasuries after falling behind. – Munis are carrying on their typical lagging relationship with Treasuries. Munis had started looking cheap compared to Treasuries last week following an extended Treasuries rally. This week munis are making up ground so far, while Treasuries are a bit softer.
Zacks: – HYLD: Crushing the high yield ETF competition. – Even with fears of a bond bubble and soaring equity prices, many investors continue to embrace bond ETFs for their portfolio. However, not just any bond ETF will do anymore, as the focus has been on short-term securities and those in the high yield space.
Reuters: – Low bond yields luring global central banks into equities. – Low returns on top-rated government bonds are leading central banks to take on more risk in their reserve portfolios, with almost two-thirds more inclined to invest in equities compared with a year ago, a survey showed on Monday.
Miami Herald: – The bond market will tell the tale. – Not that Congress will take action, but President Barack Obama goes through the fiscal ritual of releasing his budget in the coming week. The place to watch for how it’s greeted is not the Rose Garden nor the Halls of Congress. It’s the bond market.
Reuters: – Bankrupt San Bernardino, creditors to meet in ‘painfully slow’ case. – Creditors of bankrupt San Bernardino, including America’s biggest pension fund and Wall Street bondholders, are due to meet in court on Tuesday in a case bogged down in arguments over the Southern California city’s disclosure of financial records.
Bloomberg: – Kansas bondholders showing no aversion to leverage. – Kansas, which dedicated casino proceeds to pension relief last year, is considering another gamble as lawmakers debate borrowing $1.5 billion to bolster the nation’s 11th-weakest state retirement plan.
Cause the US bond markets are about $50 trillion vs $25 trillion for equity markets…
— Cate Long (@cate_long) April 9, 2013