The same did not hold true for
other bond yields, though, especially European bond yields.
Not exact matches
It is not as if Ontario is having problem finding takers for its debt and
yields on the province's
bonds are competitive with
other provinces.
In
other words, because investors can not generate a sufficient return from low -
yielding bonds, they turn to stocks as their only alternative.
Bond investors like mutual funds and pension funds hope to buy securities with comparatively higher
yields than
other asset - backed debt that could also provide diversification benefits.
The biggest losers were energy (XLE), consumer staples (XLP) and materials (XLB), all down more than 7 percent amid riding
bond yields — which makes dividend stock
yields less attractive and overrode
other factors, like stronger oil prices and a weak dollar.
Others have noted that if the Fed continues raising short - term rates while long - term rates remain stalled, it could turn the shape of the
bond yield curve upside down, a typical signal of recession.
I sent out to some people last Wednesday why I thought the CDS market would outperform ETF's, and that is still my view, and has a lot to do with the
bonds that make up the high
yield index and their rate risk exposure for some, and horrible convexity for
others.
Italian 10 - year
bond yields fell 2.5 basis points (bps) to 1.754 percent while
other euro zone
yields were pushed higher by a sell - off in U.S. Treasuries and data suggesting the euro zone economy was not as weak as expected.
Attract a wider array of capital to clean energy investments by developing innovative financing structures — from reducing investment risk though our Catalytic Finance Initiative to engaging individual investors through our Socially Responsible Investing platform to building new markets for green
bonds,
yield - cos and
other vehicles.
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
During times of recession the economy is stimulated with low interest rates and once they get low enough, the
yield on
bonds and
other fixed investments becomes so unattractive that money starts to flow into equities.
Bond yields spiked, and prices for a number of
other financial assets that had benefited from expectations of ongoing asset purchases by the Fed dropped precipitously, not just in the United States but in almost every
other country.
In viewing your chart in one of your
other posts regarding the long term returns of long
bonds when current
yield is under 3 %, why would I want to diversify into almost certain loss, after effects of inflation?
The potential counter weights that could cap the 10 - year
yield would be a negative stock market reaction that drives investors to
bonds; lower interest rates outside the U.S. that make the U.S. debt relatively more attractive, and good demand for longer - dated securities from insurers and
others.
Long - term
bond yields continue to extend their hostile upward trend, while
other market internals continue to diverge as well.
Short - term Treasury
yields have declined, but
other yield classes including utilities, long - term
bonds, and stock
yields are in hostile uptrends.
In
other words, equity dividends are higher by a third of a percentage points than quality
bond yields, and that's before the dividend tax credit and before any capital gains.
In addition to the positive technical element I mentioned earlier, the potential removal of the alternative minimum tax could cause AMT paper to trade closer to the
yield on
other municipal
bonds.
In
other words, at a certain level higher
bond yields create real competition for stocks, particularly dividend stocks, and put downward pressure on multiples.
Monti, however, was critical of German and
other insistence on austerity and surrender of control as the price for assistance to countries struggling with unsustainable
bond yields.
Because they are considered to have low credit or default risk, they generally offer lower
yields relative to
other bonds.
The goal of
yield maintenance is to allow the conduit lender to reinvest the money returned from the borrower, plus a penalty fee, into
bonds or
other investments and receive the same cash flow as if the loan hadn't been paid off early.
Stocks slide on rising rates and
yield curve inversion concerns, but a recession doesn't look likely, judging by
other economic data and the high -
yield bond...
Other bond funds focus on a narrower mix of
bonds, such as a short - term Treasury fund or a corporate high
yield fund.
At Bear, Stearns & Co., Mr. Abbott served as a Vice President in Financial Analytics & Structured Transactions (F.A.S.T) where he structured and reverse engineered complex CDO transactions, secured by a wide range of debt products, including high
yield bonds, senior secured leverage loans, trust preferred bank loans, RMBS as well as
other esoteric receivables.
Other bond funds focus on a narrower slice of the
bond market, such as a short - term Treasury fund or a corporate high -
yield fund.
On one side of the equation we have rising commodity prices, and on the
other side we have falling
bond yields.
I still think there will be a flight to safety in sovereign
bonds when stocks have a bear market but
other areas such as high
yield and corporate debt could run into some problems.
Typically, a higher - rate environment will increase spreads for banks / insurers, but you're absolutely right that the 10 - year
yield could stay flat, especially when the
yields for government
bonds of
other countries are so low.
There are
other factors impacting
bond yields this week, including Friday's jobs report, which could drive
yields higher if wages rise more than expected.
We aim to add value in the Corporate Advantage Fund by generating
yield using a relative valuation approach and investing in investment grade corporate
bonds, high
yield bonds, preferred shares, and
other fixed income securities.
Franklin Limited Duration Income (FTF) is a closed end fund that seeks high current income and capital appreciation through investment in high
yield corporate
bonds, floating rate bank loans and mortgage and
other asset backed securities.
Their opinions of that creditworthiness — in
other words, the issuer's financial ability to make interest payments and repay the loan in full at maturity — is what determines the
bond's rating and also affects the
yield the issuer must pay to entice investors.
Some of the best indicators for mortgage rate movement include the
yield on 10 - year Treasury
bonds from the government and the LIBOR — a rate that determines how much banks must pay to borrow money from each
other.
However, high -
yield (junk)
bond funds and international
bond funds can be affected by factors
other than interest rates.
An unusually high
yield relative to similar
bonds is often an indication that the market is anticipating a downgrade or perceives that
bond to have more risk than the
others and therefore has traded the
bond's price down (thereby increasing its
yield).
But this masks the reality that equities — and by extension
other risk assets — still look attractive taking into account that
bond yields are likely to stay historically low.
Interest rate risk Although high
yield bonds have relatively low levels of interest rate risk for a given duration or maturity compared to
other bond types, this risk can nevertheless be a factor.
Second, an important consequence of rising US optimism has been an increase in US
bond yields, some two - thirds of which has been imported into Canada — much more than in many
other countries.
Overall, we are seeing a pickup in
yields globally, resulting in narrower
yield differentials between U.S. Treasuries and
other sovereign
bonds.
There is the Treasury or Government
bond, the Zero - coupon
bonds, the Fixed rate
bonds, the Floating rates notes, the High -
yield bond, the Exchangeable
bonds, the Convertible
bonds, the Inflation - indexed
bonds, the Subordinated
bonds, the Covered
bonds, the Perpetual
bonds, the Bearer
bonds, the Municipal
bonds, the Revenue
bonds, and the Social impact
bonds amongst
others.
-LSB-...] The Most Interesting Asset Class Over the Next Decade «Vanguard highlighted high -
yield bonds to show how they typically perform worse than
other types of
bonds during a stock market drop.»
That lower risk to payment usually helps high -
yield bond prices not fall as much as
other bonds.
While the low level of credit spreads in Australia (and in
other major
bond markets) largely reflects favourable trading conditions for corporates, there is evidence that the search for
yield has been a contributing factor.
The
bonds of JCPenney (which is not in great financial shape) on the
other hand, were
yielding 8.3 %.
However, with
yields from treasury
bonds now at a little over 1.5 %, many investors are looking for
other ways to create income in retirement.
An increase in rates will still decrease the price of high -
yield bonds but not as much as with
other bonds because high -
yield bonds follow the economy more closely.
As I emphasized last week, «While we're already observing cracks in market internals in the form of breakdowns in small cap stocks, high
yield bond prices, market breadth, and
other areas, it's not clear yet whether the risk preferences of investors have shifted durably.
Vanguard highlighted high -
yield bonds to show how they typically perform worse than
other types of
bonds during a stock market drop.
In
other words
bond traders look at the
yield of a
bond in terms of where it is trading vs. treasuries.