Learn Bonds: – Bond yields recover after Greece scare. – U.S. bond prices fell on Monday with 30 year Treasury yields rising from a record low, with trading subdued by the threat of a massive snowstorm bearing down on New York.
Businessweek: – Municipal bond sales poised to decline as redemptions increase. – Municipal bond sales in the U.S. are set to decrease in the next month while the amount of redemptions and maturing debt rises.
ETF trends: Muni Nation: Continuing the theme. – As a follow-up to my prior post, municipal bonds continue to exhibit attractive characteristics. Here are some reference points we have used in the past that fairly represent the potential value of munis.
Bloomberg: – Record green bond issuance bolsters Chicago sewers. – U.S. municipalities are selling a record amount of debt earmarked for environmental projects as a growing appetite for the bonds pulls in issuers from the nation’s capital to Chicago’s water district.
Reuters: – East Coast storm delays $300 mln U.S. muni bond sales. – A big winter storm on the U.S. East Coast has postponed the sale of nearly $300 million of municipal bonds, according to market sources on Monday.
FT: – Investors may need to curb expectations. – (Registration) The outlook for fixed income markets this year will be determined by several macroeconomic events, such as monetary policy tightening and further quantitative easing programmes in Europe and Japan.
MarketWatch: – Seeing global opportunity, S&P Dow Jones Indices sets aggressive expansion of its fixed income business. – Anticipating flourishing, global demand for fixed income indices for use in both passive investment strategies and as benchmarks for actively managed portfolios, S&P Dow Jones Indices (“S&P DJI”) announced today an aggressive plan to exponentially grow its fixed income index business throughout the world – bringing greater transparency, integrity, breadth, and flexibility to the fixed income markets.
FT: – More volatility could see flight to quality. – (Subscription) Diverging monetary policies around the world, including the expectation of rising US interest rates and the anticipation of further stimulus measures by the European Central Bank (ECB), are producing an interesting macro backdrop for fixed income.
MarketWatch: – 10-year Treasury yield falls for fourth straight week. – The 10-year Treasury yield recorded its fourth-straight weekly decline Friday as the introduction of a massive stimulus program by the European Central Bank sent investors piling into U.S. debt on the expectation that U.S. yields will remain higher for the foreseeable future.
Investing: – 10-year Treasury note speculators reduced bearish positions for 3rd week. – CFTC Futures data shows speculators cut down on their bearish bets to lowest since November.
Bloomberg: – Treasury yield gap at lowest since 2008 on global growth concern. – The extra yield on Treasury (USGG30YR) 30-year bonds compared with two-year notes fell to the least in six years as the prospect of a global economic slowdown boosted demand for the longer-dated debt.
Bloomberg: – Company bond sales at $93 billion see slowest start since 2008. – Sales of corporate bonds in the U.S. are off to their slowest start since 2008, as company treasurers wager they can afford to wait while global central banks continue to suppress borrowing costs.
High Yield Bonds
FT: – U.S. high-yield bonds running on empty. – (Subscription) Almost four-fifths of active fund managers in the US high-yield bond market failed to beat the benchmark last year, as the sharp fall in oil prices weighed heavily on the U.S. energy sector.
Wolf Street: – Junk bonds and fracking at low oil & gas prices: Wave of defaults, “outright liquidations” next. – If oil prices stay low well into the latter half of this year and next year, borrowing basis will come down quite significantly” for oil-and-gas exploration-and-production companies in the US, “and that is when you can start to see liquidity spiraling out,” warned Tom Watters, a managing director at Standard & Poor’s oil & gas team. And that, he said, is when single-B rated companies could see a wave of defaults.
Emerging Market Bonds
Barron’s: – Emerging market yields attractive as Euro slides, Europe QE unfolds. – Asset purchases in Europe announced Thursday are likely to benefit emerging market bonds as investors seek out higher yields in the developing world.
FT: – Sunshine and blue skies create climate tragedy for reinsurers. – (Subscription) John Dizard wonders if the lack of storm losses has turned reinsurers into ‘climate refugees’
John Dowdee: – A diversified, high-income bond portfolio for 2015. – A portfolio of selected bond CEFs provides an average distribution of 8.6%. Since 2007, the composite portfolio of selected bond CEFs outperformed HYG, the popular high-yielding bond ETF. Bond CEFs offer excellent diversification when included in a traditional high-yield bond portfolio.
Investopedia: – Why investors need to rebalance their portfolios. – Rebalancing your investment portfolio simply means returning your investment assets back to their original percentages. Mitch is a 45-year-old investor with a preferred asset allocation of 60% stocks and 40% bonds. After a year of booming stock market returns, Mitch’s asset allocation drifted to 70% stocks and 30% bonds. Rebalancing will get Mitch’s investments back to his original investment percentages.
NASDAQ: – New ideas for bond investors. – As resolutions go, rethinking your fixed-income portfolio may not resonate in quite the same way as dropping 10 pounds or finally giving up that smoking habit. But if ever there was an opportunity to reassess how you approach bond investing, now is the perfect time.
CNBC: – Investor landmine: Beware risky ultrashort bond funds. – Looking for shelter when interest rates finally rise? Ultrashort bond-exchange funds may not be the ticket.
Morningstar: – The most unloved medalists of 2014. – Here is a look at 2014’s 10 most unpopular U.S.-based mutual funds with Morningstar Analyst Ratings, in terms of net outflows and what Morningstar analysts currently think of them.
Gross: German 5yr now yields nothing. With Treasury 5yr at 1.37 and a strong dollar, ECB’s QE will support Treasuries.
— Janus Capital (@JanusCapital) January 22, 2015
View on long US bonds really comes down to whether you believe (partially or fully) the type of long term inflation expectations priced in
— David Schawel (@DavidSchawel) January 26, 2015
Polar Vortex = slows the economy = buy bonds = Ultra +20
— InterestArb (@InterestArb) January 26, 2015