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DoctoRX: – Treasury bonds still look attractive for the months ahead. – While yields are lower than they were in mid-March, Treasurys retain investment merit, both for fundamental and technical reasons.
FT: – Battle is on to make bonds more transparent. – Of the 30,000 investment-grade corporate bonds trading in the US, only 20 trade more than ten times a day. The proportion of the market that turns over in a year has slipped below 75 per cent. The situation in municipal bonds, is even worse. And that means it is not so easy for a bond investor to be sure of the price she will have to pay if she puts in an order, or end up receiving if she tells her broker to sell. But all that is slowly changing.
WSJ: – Treasury is readying floating-rate debt. – Rollout of New Type of Bond May Occur in Fourth Quarter, as US Prepares for Inevitable Shift in Costs of Funding Itself.
Learn Bonds: – Apple’s blockbuster bond offering – Overly large, oversubscribed, and overrated. – When thinking about whether Apple’s 30-year bond deserves a 3.85% coupon and Aa1/AA+ ratings, consider the once dominating positions of Sony and Nokia. Furthermore, consider the fact that Apple’s future will largely depend on constant successful innovation in a highly competitive and ever-changing world of meeting consumers’ technology-related preferences. Whether Moody’s and S&P are correct to rate Apple Aa1/AA+ or whether Fitch’s view that Apple deserves a high single-A rating is correct is certainly debatable. In my opinion, they are each partly correct.
CNBC: – Stocks vs bonds: Why not bet on both? – So much for all the talk about a ‘great rotation’ out of bond markets into equities this year, analysts now say the best strategy may be to keep hold of both types of assets given mixed signals for the world economy.
WSJ: – Bond funds running low on…bonds. – The number of bond funds that own stocks has surged to its highest point in at least 18 years, another sign that typically conservative investors are taking bigger risks to boost returns.
CBS News: – Know the data before buying high-yield bonds. – With yields on all bond investments at low levels, investors are chasing yield wherever they can find it. Many look to high-yield bond funds such as the Vanguard High-Yield Corporate Fund. While its higher yield relative to safe Treasury and investment grade bonds is attractive, as with all investments you should also consider the risks first.
Forbes: – Finding attractive investment yields in an overlooked area of the market. – Future returns on most traditional investments could be fairly muted over the coming years. Obviously, bond returns will be lower than in the past 30 years with a 10-year treasury yielding 1.7%, investment grade bonds yielding around 3%, and publicly traded real estate, or REITs, yielding a little over 3%. In addition we feel commodities and equities are currently priced to deliver returns in the mid-single digits over the next several years. These all represent modest returns when compared to the past 30 to 40 years. So where do investors need to look to generate yield in the coming years?
Bloomberg: – Yield hunger overcomes risk as N.J. cuts bond cost. – New Jersey, where Governor Chris Christie has lowered revenue forecasts, sold $350 million of general-obligation debt with investors starved for yield reducing the state’s borrowing cost to the cheapest in six years.
MarketWatch: – Global bond markets look eerily like 2005. – Among the many lessons to take from former New Jersey Governor and banker Jon Corzine’s fall from grace is that timing is everything in financial markets.
Weekly Citizen: – State Treasurers overwhelmingly support maintaining tax-exempt status of municipal bonds. – Forty-two of the nation’s state treasurers are appealing to members of Congress to maintain the tax-exempt status of municipal bonds, an issue that has long-term ramifications for state budgets and the nation’s public infrastructure projects.
Bloomberg: – IBM said to plan benchmark bonds in second offering this year. – IBM the largest computer-services provider in the world, plans to sell two-part benchmark bonds in its second offering this year.
Observer and Eccentric: – Capping interest on bonds could hurt cities. – William Wild mayor of Westland MI, says he is very concerned about the attempt by Congress and the administration to cut another critical tool available to municipalities. Several proposals are being discussed in the ongoing budget negotiations that would either eliminate or place a 28 percent cap on the interest earned from tax-exempt municipal bonds.
Kirk Lindstrom: – Take profits or sell BND and buy series I bonds. – Today Vanguard’s “Total Bond Market” exchange traded fund with ticker symbol BND has a yield of only 1.58% with a premium to net asset value of $0.07 or a penalty of 0.08%. BND also has ten basis points or another 0.10% per year in annual expenses. BND has significant risk of losing money should interest rates rise. I think Series I-Bonds issued by the US Treasury are a great alternative.
Cate Long: – Pensions, retiree health costs and municipal debt. – Much of muniland is trying to balance fairness to employees, retirees, taxpayers and bondholders. There are no easy answers. It’s important to hear the stories of those who have wrestled with these issues. In the end, bankruptcy can possibly erase many liabilities for over-indebted cities. Though the debate continues about whether bankruptcy cuts off a public entity from borrowing again.
HY bonds managed to outperform Treasuries yesterday despite stock market weakness. Avg HY spread tightened by another .03% to 4.57% #bonds
— Anthony Valeri (@Anthony_Valeri) May 2, 2013