Best of the Bond Market for September 19th, 2012
Business Insider: – The US 10-Year Treasury yield could surge 100 basis points. – Bond King Jeff Gundlach says US Treasuries have bottomed in yield and he sees rates backing up as much as 100 basis points from the lows by the end of the year. That would take us to about 2.40%.
MuniNet Guide: Six Websites to Boost Your Municipal Bond Savvy – Learn Bonds made the list! 5 other great resources as well.
FT: – The Fed calls the tune in bond markets. – QE “infinity” has arrived – and with it a whole new set of challenges for fixed income investors. If there was any doubt before about the Federal Reserve’s commitment to drive investors into riskier assets, Ben Bernanke has dispelled it.
What Investment: – Beware the risks of high income investing. – Investors have been increasingly frustrated with the record low yields currently dominating the fixed income market. As a result, we’ve seen evidence that investors are moving out on the risk spectrum in an attempt to meet their income goals. A word of caution, however, equity investing is inherently more risky than fixed income investing, and investors who believe they are simply replacing some of their lower yielding fixed income instruments with higher yielding equities need to realize they are also introducing more risk to their portfolios.
Michael Aneiro: Why income investors should have a look at bank loans – Bank loans are designed to be somewhat resistant to both principal risk (because of collateral) and interest rate risk (because of floating coupons). However, bank loans are often perceived as a one-way bet on increasing interest rates or only appropriate as a tactical allocation. In reality, the bank loan asset class can serve a variety of short-term and long-term portfolio functions and deserves deeper exploration
Cate Long: – Municipal issuers: Know your friends. – New legislation by the House Financial Services Committee amends the Dodd-Frank definition of “municipal advisors” by narrowing who the law and specifically removes securities dealers from the designation.
Learn Bonds: – Retirement Investing: How to guarantee yourself a regular income check Part 1. – Unfortunately, very few of us have access to pension plan which will provide a regular check for a fixed dollar amount when we retire. The fantasy for many people is to live off the income and gains made on their investments. Unless you are very rich, this is probably not possible with interest rates being so low and the stock market being so choppy.
Bond Buyer: – Retail order periods still vital for muniland. – Despite concerns that retail investors may not always be getting a fair shake when they place an order to buy municipal bonds during a new-issue underwriting, the so-called retail order period has a long track record and will continue to be vital to the market, municipal experts and underwriters said.
Barrons: – S&P’s Three bond funds for QE3. – S&P Capital IQ’s Michael Souers turned up three funds with a minimum investment of $20,000 or less that pass the firm’s screens while also enjoying at least $2 billion in assets and no institutional shares.
Bond Squawk: – After QE3 Bond Managers Huddle Toward Neutral on Outlook for Yields. – After last week’s announcement of Quantitative Easing 3 by the Federal Reserve, Active Bond Fund Managers pared their bets on the direction of interest rates. According to JP Morgan’s U.S. Treasury Client Survey report, the number of Active Bond Fund Managers who were either bearish or bullish on bonds declined.
Euromoney: – Big bang surprises corporate bond market. – September is typically the month when the primary bond markets come back with a bang following the summer lull. This year, though, the bang came a month early as global corporate bond issuance hit a record level amid unusually calm and stable markets.
Alpha Guru: – Municipal bonds for the summer season. – A confluence of bullish and bearish factors leads to the conclusion that municipal market price activity will remain relatively subdued for the summer, with yields likely to be range bound. However seasonal factors could play a positive role.
ThomsonReuters: – Wells Fargo, Morgan Stanley face investor claims on mortgage bonds. – Investors who hold $73 billion in residential mortgage-backed securities issued by Wells Fargo & Co and Morgan Stanley have sent notices to the banks alleging they did not perform their duties servicing the bonds.
Bond Squawk: – Treasury International Capital (TIC) flows highest since January. – Yesterday, the U.S. Department of the Treasury released Treasury International Capital (TIC) data for July. The net TIC flows totaled $73.7 billions, a significant leap from June’s at $16.7 billions. The result hit the highest level of foreign buying of U.S. Treasury bonds and notes since January.
New York state might have some big budget issues ahead @DividendMaster @NYSComptroller
— Cate Long (@cate_long) September 19, 2012
muni buyers coming out of the woodworks. lots of august/september coupon and redemption proceeds finally moving off the sidelines #muniland
— Muni Trader (@MuniTrader) September 19, 2012