Not exact matches
The
yield on the benchmark 10 - year Treasury note was
lower at around 2.998 percent
at 1:07 p.m. ET, while the
yield on the 30 - year Treasury
bond was
lower at 3.18 percent.
The
yield on the benchmark 10 - year Treasury notes, which moves inversely to price, was
lower at around 2.43 percent, while the
yield on the 30 - year Treasury
bond was also
lower at 3.046 percent.
The
yield on the benchmark 10 - year Treasury notes sat slightly
lower at 2.221 while the
yield on the 30 - year Treasury
bond slipped to 2.797 percent.
«Valuations are
at extremely attractive levels considering
bond yields and
low inflation expectations.
Following the report, the
yield on the benchmark 10 - year Treasury note was
lower at around 2.959 percent
at 3:46 p.m. ET, while the
yield on the 30 - year Treasury
bond was
lower at 3.128 percent.
Germany's benchmark 10 - year
bond yield was up almost 2 bps
at 0.58 percent in early trade, above a one - week
low of 0.56 percent hit on Friday.
«
Bond yields are
at the
lowest level that most retirees have seen in their lifetime,» Zemsky said.
The
yield on the benchmark 10 - year Treasury note was slightly
lower at around 2.944 percent
at 12:28 p.m. ET, while the
yield on the 30 - year Treasury
bond slipped to 3.106 percent.
In order to understand the impact of longer duration and
low yields, let's use a real - life example of one of the largest
bond funds today and look back
at its history.
debt obligations of the U.S. government that are issued
at various intervals and with various maturities; revenue from these
bonds is used to raise capital and / or refund outstanding debt; since Treasury securities are backed by the full faith and credit of the U.S. government, they are generally considered to be free from credit risk and thus typically carry
lower yields than other securities; the interest paid by Treasuries is exempt from state and local tax, but is subject to federal taxes and may be subject to the federal Alternative Minimum Tax (AMT); U.S. Treasury securities include Treasury bills, Treasury notes, Treasury
bonds, zero - coupon
bonds, Treasury Inflation Protected Securities (TIPS), and Treasury Auctions
The real risk for
bonds, especially
at these
low yield levels, will almost always come from inflation.
With market volatility hitting multi-decade
lows, junk
bond yields also
at record
lows, the median price / revenue ratio of S&P 500 constituents
at a record high well - beyond 2000 levels, and the most strenuously overvalued, overbought, overbullish syndromes we define, I'm increasingly concerned about the potential for an abrupt «air pocket» in the prices of risky assets that could attend even a modest upward shift in risk premiums.
Although they are not as egregiously expensive as 10 - year Swiss government
bonds — currently trading
at a
yield of negative 0.25 % — Canadian
bonds are offering a relatively paltry real return, even after adjusting for
low inflation.
With Group of Seven (G7) sovereign
bond yields at historically
low levels, some income - seeking investors have turned to higher - volatility securities like dividend - paying stocks in an attempt to capture additional income.
At that time, the 10 - year Treasury
bond had a duration of just 6 years (due to the very high coupon payments and
yield - to - maturity available), while the S&P 500 had an extraordinarily
low duration of just 16 years.
With rates
at historic
lows, many investors have used high - dividend stocks, rather than
low -
yielding bonds, in pursuit of income.
«We are hoping «mom and pop» can do a little bit better than the
bond market
at a time of historically
low yields.»
The latest trend started in July when
bond yields bottomed
at record
lows.
For example, it does not include euro
bonds («reverse Yankees») that are hot in Europe, where junk
bond yields are
at a ludicrously
low 2.35 % on average, and the high - grade
yield is just above zero.
In
bond markets,
yields on 10 year
bonds are now
at their
lowest levels for two decades.
(2) Interest rates are absurdly
low, if prices start to jump quickly no sane person would hold a treasury bill / note /
bond at these
yields.
The Fear Trade, of course, is driven by
low to negative real interest rates — when inflation erodes away
at government
bond yields — deficit spending, a weaker U.S. dollar and geopolitical uncertainty.
If five years from now the
yield simply returned to its level of a decade ago (and just in case you think I'm cherry picking, over the past 25 years it has averaged a 7.5 %
yield and
at the
low in 1981 was twice that),
bond investors would suffer a meaningful loss of capital.
In a country where the unemployment rate is
at a 20 - year
low and industrial output is approaching historical highs, fueling inflation concerns, a 10 - year government
bond yield of 1.5 % is totally inappropriate and will naturally spur people to buy real estate.
These conditions comprise the following: S&P 500 overvalued with the Shiller P / E (the ratio of the S&P 500 to the 10 - year average of inflation - adjusted earnings) greater than 18; overbought with the S&P 500 within 3 % of its upper Bollinger band (2 standard deviations above the 20 - period average)
at daily, weekly, and monthly resolutions, more than 7 % above its 52 - week smoothing, and more than 50 % above its 4 - year
low; overbullish with the 2 - week average of advisory bullishness (Investors Intelligence) greater than 52 % and bearishness below 28 %; and
yields rising with the 10 - year Treasury
bond yield higher than 6 - months earlier.
And during each of those prior
yield curve inversions my answer has been the same: Because in two years your high -
yielding bond will mature and you'll be renewing
at much
lower rates.
From around 5.4 per cent
at the time of the previous Statement,
yields on 10 - year
bonds fell to a
low of 5.1 per cent in mid December, but have since risen back to near 5.4 per cent.
This led to quite a sharp narrowing in the spread in
bond yields between the two countries, from around 130 basis points
at the time of the previous Statement to a
low of 85 basis points in early December.
Bonds have been in a bull market for 35 years and
yields, though off their 2012
lows, remain
at historic extremes.
10 - year Canadian government
bond yields had declined to as
low as 0.90 % during mid-February, when recession fears hit an apex but ended the quarter
at just over 1.2 %.
Their cost of capital is a function partly of
low interest rates and part of the implicit share price is a function of the fact that investors have looked
at equities for dividends rather than
bonds for
yield because the
bond market is so expensive.
We are now
at a time when equities are relatively expensive,
bond yields are relatively
low.
Notwithstanding this rise,
bond yields in Japan remain
at historically
low levels, with 10 - year
yields at 1.8 per cent.
The
yield on the benchmark 10 - year Treasuries slumped 2 basis points to 2.97 percent, the super-long 30 - year
bond yields also plunged 2 basis points to 3.15 percent and the
yield on the short - term 2 - year traded nearly 1 basis point
lower at 2.48 percent by 12:35 GMT.
Historically, the REITs have
yielded as
low as 0.73 % over
bonds and as high as 10 %, suggesting that current
yields are
at the
low end of the range.
Additionally, a holder of a TIPS
bond is impacted by inflation; if inflation rises the holder could receive both higher income and a higher principal payment
at maturity (although it should be noted that TIPS typically have
lower yields than conventional fixed rate
bonds).
It doesn't mean that we won't experience inflation or higher
bond yields at times, but we're likely to live in a
low -
yield environment for a very long while.
With
yields having been so
low for so long,
bonds are suddenly providing some competition with equities
at these higher
yields levels.
There are other examples of speculation such as some European junk
bonds trading
at yields so
low that no company should ever have to suffer the indignity of bankruptcy but for pure entertainment value you can't beat Jesus coin.
Yields moved
lower as the
yield - to - worst of the S&P / BGCantor Current 10 Year U.S. Treasury
Bond Index is now
at a 2.49 % which brings it back down to level Read more -LSB-...]
You can see government
bond yields in the advanced nations are
at historic
lows.
Even so, with the market's valuations today being cheaper than the two previous times that the S&P 500 traded
at these levels — and with the
yields on the two primary alternatives,
bonds and cash, being very
low by comparison — this could be a great time to own companies by investing in th stock market.
U.S.
bonds are
at the
lowest yield in more than a year and oil continues to tumble.
After touching a
low of 2.7 per cent in June,
yields on 10 - year indexed
bonds now stand
at around 3.3 per cent, 15 basis points higher than their level in early May.
If we look
at the Bloomberg Barclays Global Aggregate Financial
Yield to Worst (below) we can see that in 2008
yields of global financials
bonds spiked above 8 % and since then, they have gradually retreated to
lower levels.
As
yields go out, it
lowers the collateral value of the
bonds and as we were saying earlier before we began the show, Richard, the global swaps marketplace is over $ 600 trillion and
at least $ 400 trillion of that is in
bonds.
Even knowing the underlying scenario it boggles the mind to continue to see the RIDICULOUS
LOW YIELDS that inhabit the charts of various EU sovereign
bonds (Spain 10 - year 1.26 %; Belgium 0.82 %; Portugal 1.65 %; and Italy
at 1.74 %).
I do think there is merit in looking
at general rates (we likely won't return to the rate environment of the early 1980's for example), but I wouldn't be getting excited about stock prices
at these levels for the sole reason that
bond yields are really
low.
The
yield on the benchmark 10 - year Treasuries slipped 1 basis point to 2.95 percent, the super-long 30 - year
bond yields also fell 1 basis point to 3.12 percent and the
yield on the short - term 2 - year traded 1-1/2 basis points
lower at 2.48 percent by 10:45 GMT.
All the excess liquidity being added to Europe and suppressing
bond yields makes European equities, which trade
at markedly
lower multiples than in the U.S., relatively attractive.