Sentences with phrase «in nominal yields»

Not exact matches

«If we assume extremely pessimistic nominal earnings growth of 3 % over the coming decade and a compression in the price - earnings ratio to 10, equities would still deliver returns above current bond yields.

In bonds, Friday's tepid unemployment report was accompanied by a substantial decline in both real and nominal yields - enough to move the Market Climate in bonds to a condition of both unfavorable valuations and unfavorable market actioIn bonds, Friday's tepid unemployment report was accompanied by a substantial decline in both real and nominal yields - enough to move the Market Climate in bonds to a condition of both unfavorable valuations and unfavorable market actioin both real and nominal yields - enough to move the Market Climate in bonds to a condition of both unfavorable valuations and unfavorable market actioin bonds to a condition of both unfavorable valuations and unfavorable market action.

Even as the ten - year yield soared to 15 % in 1981, the nominal drawdown was just 16 %.

Positions that have recently come undone include betting on steepening yield curves and inflation expectations (inflation - linked over nominal bonds)-- and in equity markets, picking value over growth shares.

We see higher inflation expectations, rather than rising real yields, driving rises in nominal bond yields.

Higher rates effected performance, but nominal returns were still positive because eventually investors were able to make up for the price losses through the increases in yield.

In contrast, medium - term inflation expectations implied by financial market prices, which are calculated as the difference between nominal and indexed bond yields, have been broadly stable at around 2.6 per cent over the past nine months.

For roughly three decades, U.S. non-financial corporate debt as a percentage of U.S. nominal GDP and the high yield default rate moved in tandem.

Medium - term inflation expectations of financial market participants, as implied by the difference between nominal and indexed bond yields, have risen to around 3 per cent in October, from less than 2 per cent at the beginning of the year.

In part, this increase might be a mechanical response of nominal yields to developments in world bond markets, rather than signalling a lasting change in the financial market's view of the inflation outlook in AustraliIn part, this increase might be a mechanical response of nominal yields to developments in world bond markets, rather than signalling a lasting change in the financial market's view of the inflation outlook in Australiin world bond markets, rather than signalling a lasting change in the financial market's view of the inflation outlook in Australiin the financial market's view of the inflation outlook in Australiin Australia.

The early weeks of 2015 are the first time in history that both 10 - year Treasury yields and our estimates of prospective 10 - year nominal total returns for the S&P 500 have both declined below 2 % annually.

Yet low nominal gross domestic product growth and aging populations argue for lower bond yields than in the past — and sustained demand for high quality bonds.

The chart below shows the difference in the nominal and real yield curves for government bonds in a number of advanced economies.

Breakeven rates — the difference in yields between nominal and inflation - linked bonds of the same maturity — reflect market expectations for inflation.

Our model indicates that going forward, long - term yields will likely be subject to three upward pressures: (1) Our forecasted increase in inflation will boost nominal GDP growth; (2) As forward guidance is replaced by a data - dependent monetary tightening, volatility in short rates will increase; and (3) As the impact of QE on the Treasury market fades, long - term yields will trend back to their historical link with nominal GDP growth.

Yields on inflation - indexed bonds have moved in a similar way to nominal yields since the last StatYields on inflation - indexed bonds have moved in a similar way to nominal yields since the last Statyields since the last Statement.

When savings are high, the term premium is more likely to be low, in the process keeping nominal yields down.

In contrast to yields on nominal bonds, yields on inflation - linked bonds have for the past six months remained close to their lowest recorded levels.

The level of yields — around 4 1/4 per cent at present — looks low not only on historical comparisons but also relative to normal benchmarks such as the growth rate of nominal GDP, which in the US is currently around 6 per cent (Graph 16).

(It's a bit similar to the «are stocks expensive» issue: they look expensive in nominal earnings yield terms, but not when seen as a spread over risk free.)

Eleven sheets wired in series yield a battery pack providing a nominal 366 volts and 56 kilowatt - hours of electrical power.

Positions that have recently come undone include betting on steepening yield curves and inflation expectations (inflation - linked over nominal bonds)-- and in equity markets, picking value over growth shares.

Despite the sharp rise in inflation expectations, 10 - year breakevens (the difference between the yield on a nominal fixed - rate bond and the real yield on TIPS) remain depressed relative to their long - term history.

While the initial yield was high, your overall return has been eroded by a 25 % decline in the nominal value of your investment.

At a 10 - year Treasury yield of 1.7 %, interest on reserves of 0.25 %, and a monetary base now at about 18 cents per dollar of nominal GDP (see Run, Don't Walk), further purchases of long - term Treasury securities by the Fed would produce net losses for the Fed in any scenario where yields rise more than about 20 basis points a year, or the Fed ever has to unwind any portion of its already massive positions.

As I noted this past January in Sixteen Cents: Pushing the Unstable Limits of Monetary Policy, a collapse in short - term yields to nearly zero is a predictable outcome of QE2, based on the very robust historical relationship between short - term interest rates and the amount of cash and bank reserves (monetary base) that people are willing to hold per dollar of nominal GDP:

They are attempting to achieve high smooth yields well in excess of the nominal risk - free rate on a constant basis.

However, in terms of interest, the nominal rate also contrasts with the annual percentage rate (APR) and the annual percentage yield (APY).

In our latest white paper, Senior Portfolio Manager Duane McAllister explains how the recent boost in short - term yields not only allows investors to once again earn a reasonable nominal return on their money without needing to take significant duration risk, it also provides an opportunity to earn a positive real return, since core inflation measures remain below the Fed's 2.0 % targeIn our latest white paper, Senior Portfolio Manager Duane McAllister explains how the recent boost in short - term yields not only allows investors to once again earn a reasonable nominal return on their money without needing to take significant duration risk, it also provides an opportunity to earn a positive real return, since core inflation measures remain below the Fed's 2.0 % targein short - term yields not only allows investors to once again earn a reasonable nominal return on their money without needing to take significant duration risk, it also provides an opportunity to earn a positive real return, since core inflation measures remain below the Fed's 2.0 % target.

Savers who park their emergency fund money in a bank or credit union, or purchase money market funds and Certificates of Deposit (CDs), may well see a nominal bump in their yield.

Think of 1979 - 82: by the time bond yields were nearing their peak levels, bond managers were making money in nominal terms with rates rising because the income from the coupons was so high, and it set up the tremendous rally in bonds that would last for ~ 30 years or so.

For example, if we assume extremely pessimistic nominal earnings growth of 3 % over the coming decade and a compression in the price - earnings ratio to 10, equities would still deliver returns above current bond yields.

Today, they hover well under 2 %, while nominal bond yields are in the 5 % range.

In this situation, the real yield would rise on both nominal Canadas and RRBs.

The yield of a global portfolio is about as low as its ever been from a cyclically adjusted P / E, credit spread, and nominal interest rate standpoint, while the global economy is more likely to be in the later (than early) stages of the business cycle.

One last thing... the S&P 500 had a great 10 % long - term return due to (approximate and nominal) a 6 % increase in earnings and a 4 % yield.

Exhibit 3 shows the yield for 5 - and 10 - year nominal bonds went down 30 bps and 54 bps, respectively, but we can see positive returns in the local indices.

As Jim Bianco has done, we can compare the year - over-year change in nominal GDP with the 5 - year Treasury yield, which have historically tended to move together over time.

The chart below shows the decline in the US Treasury yield over the last 21 years split between the real yield, as estimated by the Bloomberg Barclays US Inflation Linked Bonds Average Annual Yield, and the level of inflation expectations implied by the 10 - year nominal Treasury Bond yyield over the last 21 years split between the real yield, as estimated by the Bloomberg Barclays US Inflation Linked Bonds Average Annual Yield, and the level of inflation expectations implied by the 10 - year nominal Treasury Bond yyield, as estimated by the Bloomberg Barclays US Inflation Linked Bonds Average Annual Yield, and the level of inflation expectations implied by the 10 - year nominal Treasury Bond yYield, and the level of inflation expectations implied by the 10 - year nominal Treasury Bond yieldyield.

Cash rates are zero in nominal terms, and negative in real terms, bond yields are not going up anytime soon.

For roughly three decades, U.S. non-financial corporate debt as a percentage of U.S. nominal GDP and the high yield default rate moved in tandem.

Here's my bias: at the first investment shop I worked in, the high yield manager told me that there is a nominal yield for high yield bonds which reflects the risk.

Just whack it with open market purchases or a tender, finance it with low yield guaranteed debt, and enjoy the reduction in nominal debt outstanding.

We use nominal returns because the bond yield is stated in nominal terms and includes an expected market inflation rate.

Based on the spread between nominal and inflation protected yields, the expected 10 - year inflation rate is 2.75 percentage points, up more than 100 basis points in the past year.

As a result, while markets would appear to be quite expensive today based on nominal earnings yield, which is in the top quintile of all values over the past 140 years, the real earnings yield is less extreme because yoy inflation is so low.

Thus, while TIPS yields are at historically low levels, TIPS continue to look like a clear choice over nominal Treasuries in relative terms, because investors aren't paying a premium for unexpected inflation.

Note that because we are using real earnings yield rather than nominal earnings yield, markets can get cheap or expensive in three ways:

@Boa05att: Yes, this is what has not been done in Fukushima, where the risk of a big earthquake had been calculated as once in 1000 years or so, which seem small at first glance, but yielding 1/30 within nominal reactor lifetime, which is very big, taking into account the potential (and then real) damage.

An increase in marginal yield corresponds to an increase in marginal risk, but that risk is not born evenly by investors: the ones with bad setup end up with a vacant property, while the ones with good setup can access that higher nominal yield.