Barry Ritholtz: – Stocks beat bonds (finally). – One of the things that this rally has managed to finally accomplish is that it has given stocks a (short term) performance advantage over bonds.
Business Insider: – BofA analyst describes junk bond market as entering “coffin corner”. – The high-yield market today finds itself at a point where the positive momentum required to maintain continued demand for the asset class, whilst still producing positive momentum would imply pushing the market valuations further beyond any reasonable levels, thus undoing the very reason for being aggressive in buying risk at these levels.
Barron’s: – Beware stocks in the near term – Goldman Sachs – Goldman team calls for an overweight position in cash, neutral in commodities and 5-year corporate bonds and underweight government bonds; the 12-month position is overweight equities, neutral on commodities, 5-year corporate bonds and cash and underweight 10-year government bonds.
Learn Bonds: – Should you avoid bank bonds? – A year ago, Learn Bonds was suggesting that investors looking for additional yield might consider financial bonds. But yields of all financial bonds have come down tremendously over the last year compared to non-financial bonds. In fact, the yields on industrial bonds and financial bonds are now comparable. So are financial bonds still a good investment?
Noahpinion: – The corporate cash puzzle. – Corporations are taking a much bigger slice of total income — and are showing little inclination either to redistribute that slice back to investors or to invest it in new equipment, software, etc.. Instead, they’re accumulating piles of cash. But why is this happening and what can be done about it?
ETF Trends: – PIMCO to list active currency ETF on Tuesday. – PIMCO plans to launch an active currency ETF designed for investors who want to protect against a devalued U.S. dollar with the bond giant’s expertise in global markets.
Bloomberg: – Insolvency looms in Detroit suburb as movie studio fails. – Investors chasing the biggest rally in high-yield municipal debt since 2008 are drawing the line at the bonds of Allen Park, Michigan, whose ill-fated plan to build a movie studio has left it facing possible bankruptcy.
Housing Wire: – Investors search for alternative routes in bond markets. – With bond gurus warning of an inevitable increase in interest rates and hit to bonds and with equity markets trading at historically high levels, investors with capital to deploy are searching for returns. The environment suggests the risk-on trade is still very much in effect, but the liquid markets represent a scary place to deploy capital given their performance over the past few years.
Barron’s: – ETFs changing how bond markets trade. – Mark Wiedman, managing director, global head of iShares at BlackRock (BLK), tells listeners at a conference this morning that exchange-traded funds are stepping into parts of the bond market that have been vacated by large investment banks and are changing the way that those markets behave.
Psych Trader: – S&P500 moves ahead of high yield corporate and Treasury ETFs. – The iShares iBoxx High Yield Corporate Bond ($HYG) and the iShares Barclays 20+ Year Treasury Bond ($TLT) ratio is at its 20 EMA while $SPX moves higher.
David I. Templeton: – Dangers lurking in the bond market. – The danger for bond investors is the decline in principal value that results from a rise in interest rates. Bonds are expected to be the stable value of one’s investment portfolio; however, with rates as low as they are today, there isn’t much room for them to go to much lower.
Bond Buyer: – 2012 municipal market statistics review. – Take a look at how the 2012 muni market stacks up, with the Bond Buyer annual municipal markets review.
Silk Invest: – Frontier market fixed income and the end of global negative interest rates. – In our recent outlook for 2013, one of the main points we made was about ‘The end of the global negative interest rates environment’. What we mean by this is that real yields (yield minus inflation) have now turned negative in most developed bond markets. This is an imbalance that eventually will have to be set straight, either by lower inflation or by rising interest rates (unpopular!). And soon we’ll find out what.
Investor Place: – Vanguard finally charts course for international bonds. – For years, Vanguard resisted offering a foreign bond mutual fund, but in 2011 it seemingly caved to investor demand and announced the launch of two index funds — one for foreign developed markets and one for emerging markets. However, as their release date approached, the funds’ introduction was postponed.
Bloomberg: – Dividends top bond yields by record as limited pays 10%. – Companies around the world are rewarding shareholders with the highest dividends in more than two decades compared with bond interest payments, even after the best start to a year for equities since 1994.
Bond Buyer: – Bill to make Build America Bonds permanent. – Rep. Gerry Connolly, D-Va., has introduced legislation that would permanently extend the Build America Bond program, but at the lowest proposed subsidy rate yet.
Everyday Finance: – Junk Bonds: Adjusting for ‘The Great Rotation’ – The market for junk debt is growing faster than anyone could participate. Low returns on fixed income of all types bring new people to the market who might have never, ever thought about owning anything lower than BBB- before. As a result there are some interesting developments afoot in the junk bond market.
Oblivious Investor: – Should you add international bonds to your portfolio? – Adding international bonds to your portfolio could offer a diversification benefit, with the simple reason that interest rates in the US are largely affected by the actions of the Federal Reserve, whereas rates in other countries are going to be more heavily impacted by the actions of their own respective governments.
Gartman: if this is end of bond bull run, there'll be plenty of time to discern. No need to panic and rush to reallocate #InsideETFs
— ETF.com (@ETFcom) February 11, 2013