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Where Did All The Money Go…Bonds Are Poisonous…No Need to Fear The Big Bad Bond Market…and more!

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BusinessWeek: – Where did all the money go? – You can see how much money exited bond funds and money markets funds, about $83B in total. You can also see how little migrated to equities ($300M). So much for the so-called Great Rotation from bonds to equities. Yet the money had to go somewhere, and the Ned Davis team believes a large portion flowed into the banks. Here are the actual numbers for the five-week period ended July 2.

Investment Week: – All conventional bonds are poisonous. – Steve Russell, investment director and manager of the £2.9bn CF Ruffer Total Return fund, tells Investment Week. “Since the crisis, we have not owned a single conventional bond anywhere in the world because we think they are all poisonous. Our entire bond holdings or fixed income holdings have been index linked and only in index-linked bonds of the countries that control their own printing presses, so basically the UK and US, and that is held as our protection against the inflationary outcome that we expect.”

DealBook: – Despite fears, bond market is functioning fine. – How is the financial system faring after the turbulence that swept through the bond market? Pretty well, judging by the latest financial results from Wall Street banks.

Learn Bonds: – Municipal-to-Treasury yield ratios signal value. – A seasonal summer boost in the municipal bond market has yet to materialize, but value has emerged and investors are taking notice.

CNN Money: – Don’t panic, sell bonds. – It’s no secret that investors have been bailing out of bonds during the past couple of months, but panicky investors should think twice about cashing out.

Citywire: – Value in high yield bond market has finally returned. – Of the total yield increase at the index level, a little over a quarter emanates from the increase in government bond yields with the rest coming from spread widening. I believe the main driver for markets generically and for high yield has been an unwinding of leveraged carry trades.

The Journal: – Don’t be bullied by bonds. – Stocks are best placed to benefit from ongoing growth, and remain inexpensive. Indeed, if we’re right about there being further loosening of monetary policy on the horizon, the assets that have been boosted excessively by quantitative easing and low interest rates are most vulnerable.

Reuters:  – Financial advisers warn bond clients to brace for losses. – Last month, Houston-based financial adviser Gene Theobald picked up the phone and began making calls to clients, telling them to expect a reality check in their June account statement.

Chicago Tribune: – Winnetka to issue bonds for stormwater sewer project. – The Winnetka Village Council has authorized staff to work with the village’s financial consultant to issue $18.5 million in bonds to help pay for a new stormwater sewer system, officials said.

What Investment: – Treasury Bonds ‘an insurance policy’ for investors says fund manager. – US government bonds should serve as an ‘insurance policy’ for investors in case policy makers are being over optimistic about growth prospects in developed economies, Percival Stanion of Barings Asset Management has said.

MoneyBeat: – Investors clamor for Goldman bond offering. – Goldman Sachs Group Inc. wowed investors twice on Tuesday. The securities firm’s second-quarter net earnings of $1.93 billion beat analyst estimates, thanks to a jump in debt underwriting. Shortly afterward the firm launched a $2.5 billion bond offering that saw nearly $6 billion of orders, according to a person familiar with the deal.

Investment News: – Is 2013 a 2008 moment for bond investors? – Debt market pain has clients fleeing fixed-income world; may not be back for a long time.

ETF Daily News: – 4 Reasons to like municipal bonds. – Why are investors seeking more and more munis? I’d say there are four main factors, which I will cover here in my 30,000-foot view of Muniland. In future posts, I’ll delve more deeply into these and other topics, and I also look forward to hearing from you with any questions you’d like me to answer when it comes to muni bonds.

Ploutos: – Bond market review Q2 2013. – A forward-looking examination of the relative value of various fixed income markets in addition to the review of second quarter price actions.

FT: – Investors return to junk bonds in numbers. – Investors are returning to the riskiest corporate bonds in US debt markets in numbers, shrugging off recent sharp losses and record outflows from the securities in June.

Reuters: – Top fund managers were blindsided by U.S. bond market carnage. – The plunge in the U.S. Treasuries market in the past couple of months may well have been one of the most well-telegraphed reversals in financial market history.

The Washington Times: – Beggaring states by taxing municipal bond income. – Obama’s proposal to levy federal taxes on municipal bond income, is a violation of investor trust.

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Simon G

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