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WSJ: – Detroit bankruptcy official says no special treatment for general-obligation bonds. – General-obligation bondholders will continue to be treated as unsecured creditors, Detroit’s emergency manager, Kevyn Orr, said in an interview Friday in New York, adding that he is focused on fixing Detroit and not on the implications the restructuring could have on the broader municipal-bond market.
MuniNetGuide: – After Detroit, is Chicago next? – Just when we thought 10-year Treasuries had found some degree of support around the 2.50% level, fresh new supply and hints of economic stabilization in Europe have brought on renewed weakness this week. Traders are also starting to focus on the July employment data due out next week. The 10-year and 30-year bonds closed last night at 2.61% and 3.65%, respectively.
WND: – Junk bonds will crash. – Since early May, the iShares High-Yield Bond Fund (HYG) has given up all the capital gains it made in the previous seven months. And on June 6, market research firm Lipper released data showing a record volume of investor redemption from mutual funds and exchange-traded funds holding high-yield bonds. Investors pulled $4.6 billion out of the high-yield market. It’s time to get out of bonds… especially high yield corporate bonds.
Learn Bonds: – To-maturity bond funds: Gaining in popularity and a good option. – With interest rates very likely to rise in the upcoming years, there are only three good bond or bond-like investment options for people who are investors vs traders ―well-chosen CDs, individual bonds, and to-maturity-then-cash (TMTC) bond funds. In this article I would like to summarize the factors that determine whether individual bonds, TMTC funds, or a combination of the two are best for you.
CNBC: – Detroit bankruptcy case could bring unwanted change for muni market. – Detroit’s bankruptcy is sending shivers through the more than $3.7 trillion municipal bond market, as investors worry the case will change the way certain bondholders are dealt with.
Barron’s: – Detroit creditor plan a ‘game changer’ for muni market, rating agencies. – Barron’s spoke this week with Eric Friedland, head of municipal credit research at Schroders, and asked his take on what the Detroit bankruptcy means for the muni market. So far he says it’s exacerbated recent market-wide weakness but it remains a unique case.
FT: – Bankrupt Detroit takes a hard line with its creditors. – The two men in charge of Detroit’s bankruptcy are taking a hard line with creditors, waving away the concerns of Wall Street as posturing begins ahead of tough negotiations on a financial restructuring of the Motor City.
CNBC: – Municipal bonds ‘hemorrhage’ $1.2 billion on Detroit fears. – Municipal bond funds saw outflows of $1.2 billion in the week ending July 24, on concern that Detroit’s filing for bankruptcy – the largest in U.S. history – will set an important precedent and more cities could follow suit. It was the ninth consecutive week of outflows from the fund type.
WSJ: – Bonds could get swept away by the flow. – Investors’ love affair with bonds is going through a bit of a rough patch. If they don’t make up soon, things could get really rocky.
Business Insider: – There was a mad rush into junk bonds this week. – Big flows into stock market mutual funds and ETFs continued this week, while investors continued to redeem money from funds invested in government bonds.
CNBC: – Junk bonds are back! Thirst for yield returns. – After talk of a “great rotation” into stocks, Fed “tapering” fears and an “unprecedented” $80 billion pulled from bond funds, it now appears that the credit market has shifted into a higher gear, according to Bank of America Merrill Lynch, which pointed to “red hot” inflows into European high-yield bonds.
AllianceBernstein: – Municipal Bonds: Equipped to weather rising rates. – Muni bonds suffered a rout recently when anxiety over the Fed’s taper of bond buying roiled fixed-income markets, leaving many investors wondering where to turn. As it turns out, munis have historically been effective shock absorbers. We believe that, given the right positioning, munis can help weather rising rates.
Bloomberg: – Detroit’s 86-cent water debt seen delivering profit: Muni credit. – Detroit’s bankruptcy is providing a buying opportunity in the city’s $5.4 billion of water and sewer debt as investors bet that bonds trading at the deepest discount since 2011 will get paid in full.
Citywire: – Bonds, bonds, bonds, bonds: what do they all mean? –There are four different types of bond in the financial world, and it is important not to mix them up! This is the latest video in the The Lolly Investor Programme, a weekly series aimed at beginner investors.
FT: – U.S. equities link to bond yields returns. – When the S&P 500 balked midweek at the 1,700 level, one reason cited by traders for the relapse – alongside some disappointing company earnings – was another sharp rise in bond yields.
Interactive Investor: – Viewpoint: Ignore fears of “lost decade” for bonds. – Long-term bond rates have risen globally – just a bit – making bond prices fall, hurting bondholders somewhat in the near term. Yet the media cries it’s a lost decade for bonds. Ignore it. No one can make a decade-long forecast. Plus, recent bond volatility is normal.
Daniel R Moore: – Municipal bond market troubles – What you might like to know. – There are countless headlines about the impending doomsday for municipal bonds driven by the underfunded pension system for public workers in many municipalities across this country. I would say that this is not really new information, but it does raise fears in the market. So, it is a good idea to understand what is happening, and whether you should be bailing out before financial Armageddon, or looking for opportunities that are being created by the fear mongers.
What Investment: – Don’t abandon bonds for equities’ says Rathbones. – There are still opportunities in the bond market and investors shouldn’t ‘totally abandon’ those in favour of equities, a Rathbones analyst has said.
Reuters: – Corporate bond buyers come back with a vengeance. – Are US fund managers a collection of manic-depressives swinging rapidly from one extreme to the other? A cursory glance of the US corporate bond markets might make you think so.
— Brian Chappatta (@BChappatta) July 26, 2013