To get the Best of the Bond Market delivered to your email daily click here.
Bloomberg: – Least sales since ’11 offer cushion against losses: Muni Credit. – The steepest losses in almost three years for U.S. municipal debt may wind up helping bondholders. Issuers jolted by rising yields are scaling back sales to the slowest pace since 2011, helping limit declines in the $3.7 trillion market.
FT: – Tapering signals suggest we’ve seen the best. – We should expect returns to be lower from here than in the recovery phase. For investors, that means keeping down the cost of investing is even more important if returns overall are low.
Bloomberg: – Pimco sells provinces after worst rout since ‘94. – Provincial bonds, touted two months ago by Pacific Investment Management Co. as a way to offset low government bond yields, are losing favor at the world’s biggest bond-fund manager amid their biggest quarterly loss since 1994.
Learn Bonds: – How expensive are bonds relative to stocks now? – Even with the recent increase in interest rates, bonds are still far overpriced in comparison to stocks. This is important to understand in managing your retirement portfolio. It is also important that you are well-prepared to lessen your overweight position in stocks, and increase your underweight position in bonds and/or CDs, as interest rates increase, as is very likely to continue to occur.
FT: – Lunch with the FT: Meredith Whitney. – The Wall Street analyst who foresaw the U.S. banking crisis has since been vilified for predicting defaults that have yet to happen. She talks about standing out in a ‘dull’ industry.
VizMetrics: – 3 portfolios inspired by Graham, Swensen, Browne: A Risk vs. return analysis. – As part of our ongoing effort to identify the best and worst asset allocation portfolios, we compare some ETF portfolios inspired by investing gurus: Benjamin Graham, David Swensen, and Harry Browne.
MarketWatch: – Big bond firms brace for higher yields. – A majority of fixed-income strategists expect yields on the 10-year Treasury note to rise by the end of the year, according to a MarketWatch survey of over a dozen big brokerages and bond funds.
Advisor.ca: – Fixed income ETFs work for investors. –Fixed-income ETFs hold significant potential for institutional investors, who are using them in increasingly sophisticated ways.
Brad Kenagy: – How I’m replacing my broad Treasury ETF. – With the recent increase in interest rates since May 2nd, and the ensuing drop in my broad laddered treasury ETF (PLW) that I own in my Roth IRA, I thought it would be a good time to evaluate my Treasury bond position.
Index Universe: – Bond volatility tests ETFs. – Last month was far from the first time that bond exchange-traded funds (ETFs) have suffered a sharp sell-off. Notable episodes of market volatility occurred in 2008 and 2010, causing some fixed-income trackers, particularly those in less liquid areas of the market, to register large discounts to their net asset value (NAV) in secondary market trading.
Detroit Free Press: – Kevyn Orr to load bankers in a bus, show them Detroit’s worst neighborhoods. – Detroit emergency manager Kevyn Orr, locked in a tense standoff with creditors whom he has asked to accept a fraction of the $11.4 billion they’re owed, will load a group of about 25 bankers on a city bus next Wednesday, and lead them on a tour of some of Detroit’s most desperately blighted areas.
Reuters: – U.S. and European banks prepare for capital race. – European and US banks are facing the prospect of having to issue much more subordinated debt, and at a much higher cost, as regulators stamp out low leverage ratios and investors demand higher concessions for market volatility.
HousingWire: – Investors experience worst bond losses since 2008. – Investors are finding no shelter from the worst corporate-bond losses in almost five years as debt plunges for the most creditworthy to the riskiest borrowers in every industry worldwide.
Reuters: – Illinois revenue up 6.7 pct in fiscal 2013 -report. – Illinois’ general fund revenue grew by 6.7 percent in fiscal 2013 over fiscal 2012, slightly better than expected, mainly propelled by stronger income tax receipts, a state legislative commission reported on Friday.
ETF Trends: – Insurance ETFs for rising interest rates. – As interest rates rise from a three decade low, investors will have to shift strategies and can even capitalize on potential high performers, such as insurance companies and related exchange traded funds.
Indexuniverse: – Belly of T-Curve moves most with Fed. – Prices and yields of U.S. Treasurys ETFs have been moving quite a lot in the nearly two months since the Fed began signaling that the end to the post-crash period of easy money may start to take shape this year, but nowhere has the movement been more pronounced than in the middle of the yield curve.
Current coupon MBS (bonds the Fed is buying) under huge pressure. 3's 17 and 21 ticks wider than swaps & USTs
— David Schawel (@DavidSchawel) July 5, 2013
Market grudgingly starting to accept these new yield levels.
— Ed Bradford (@Fullcarry) July 5, 2013