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TF Market Advisors: – Where would bonds trade if the Fed “normalized” policy. – Before we talk too much about “tapering” or “unwinding” or whatever euphemism you want to use for the Fed buying less, but still a heck of a lot, of bonds, we thought it would be interesting to play around with where rates would be if the Fed just had a “normal” policy. We think it might be useful to think about that for a bit. Just drop the idea of QE and tapering and play “what if” with the treasury market.
Reuters: – Detroit takes aim at its pensioners. – Detroit, which is trying to avoid insolvency by proposing what Moody’s this week called an “unconventional and precedent-setting restructuring.” It plans to dip into its pension fund, as part of a proposal to creditors.
FT Adviser: – Bonds ‘compelling’ after volatility. – Last month’s spike in bond market volatility has made some areas of the corporate bond market “more compelling”, according to Pimco’s Ketish Pothalingam.
Learn Bonds: – 2 REIT preferreds yielding over 6%. – The preferred stocks of many REITs, like the common stocks, have recently sold off. As the selloff intensified, I decided to do some shopping. In this article, I would like to introduce readers to two of the preferreds I purchased and the businesses backing those preferreds.
ETF Daily News: – Assembling your high-yield bond ETF game plan. – While the equity market is continuing to show the initial signs of cracking under the pressure of recent economic data, high yield bond investors have already gone for a bit of a ride. Spreads are gyrating all over the place, and if you have lightened up on your high yield bond exposure over the last few months in anticipation of a better entry point as spreads inevitably widen; you should be paying very close attention to what happens next.
FT: – Bond stampede fear spurs race for reform. – If there is one thing that keeps bond investors awake at night, it is the fear of a stampede for the exit. And for good reason: there could be a pile-up in the doorway, leading to extreme market swings.
Bloomberg: Investors switch bonds for stocks, BofA survey shows. – Investors cut bond holdings to a near two-year low this month, and bought stocks, as expectations the Federal Reserve may remove monetary stimulus bolstered growth forecasts, a Bank of America Corp. (BAC) survey showed.
ETF Trends: – New High-Yield ETF to track global short-maturity bonds. – Invesco PowerShares plans to launch a new ETF this week that invests in global high-yield bonds with shorter maturities to protect against the risks of rising interest rates.
FT: – Markets Insight: It’s hard to write a happy ending to ‘QE’ story. – Was it just a transitory bout of angst? Or have we finally witnessed the end of the great 32-year bull market in bonds? It feels to me like the latter with yields on 10-year and 30-year US Treasuries up by half a percentage point since the start of May and emerging markets in a funk. We are in such uncertain monetary territory that anything could yet happen to upset that judgment. What is clear is that the rules of the global market game have changed in a remarkably short space of time.
MarketWatch: – How to have your stocks and income too. – Multi-asset income ETFs are getting more attention as dividend-paying stocks face competition for investors’ dollars from rising yields in the bond market.
Bloomberg: – PIMCO cools on covered debt after record rally. – Europe’s covered bond market is falling out of favor with Pacific Investment Management Co. after a record rally sent relative yields to a three-year low.
FT Adviser: – GLG manager snaps up Apple bonds after price drop. – Bond manager Jon Mawby took a slice out of the tech giant for his portfolio following the 9 per cent fall in price.
Goldseek: – Taper Talk: Bonds at risk – Where to hide? – Induced by “taper talk,” volatility in the bond market has been surging of late. Is there a bond bubble? Is it bursting? And if so, what are investors to do, as complacency might be financially hazardous.
DoctoRX: – Speculators fight the Fed once again in the bond market: Can they finally win one? – Score one for persistence! Small speculators in the futures markets, unbowed by numerous losses the past five years, are again bearish on Treasuries. They are shorting bonds at a fraught time given this week’s Federal Open Market Committee (FOMC) meeting.
Advisor.ca: – Handling bonds in a low rate environment. – High-yield corporate bonds might be appealing in low-rate environments, but “there’s potential for default, and the credit risk is higher,” says Nicholas Leach, vice-president of global fixed income, high yield at CIBC Global Asset Management.
Wall St Sector Selector: – Gone are the days when municipal bonds were safe. – Dear reader, as it stands, cities across the U.S. economy are posting higher budget deficits. Remember: the main source of a city’s income is usually property taxes. With the housing market still depressed, I doubt many troubled cities will be able to get out of their rut anytime soon. The impacts of this on municipal bonds will be harsh.
Barron’s: – Bond-fund worry gauges are through the roof. – Amid all this interest-rate worry, the cost of protecting a bond exchange-traded fund from price declines lately has been soaring.
No doubt fixed-income ETFs have become a price-discovery mechanism that mitigates bond market price opacity, panelists say #insideindexing
— ETF.com (@ETFcom) June 18, 2013
FYI: Most Detroit sewer and water bonds are trading above par so be very skeptical of a recommendation to buy them. Too expensive. #muniland
— Cate Long (@cate_long) June 18, 2013