For a long period of
time bond yields remained historically low and finally they are feeling the pinch of such a large amount of stale investments.
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.
Not exact matches
The dollar has rallied through much of the past week as concerns over the U.S. - China trade dispute receded, and as the U.S. 10 - year
bond yield shot past 3 percent for the first
time in four years.
Two - year Treasury
bond yields rose above the average S&P 500 stock dividend in January for the first
time since 2008.
It sold the
bonds at high enough
yields to receive orders for three
times that amount.
(Repeats to additional subscribers) NEW YORK, April 24 (Reuters)- The U.S. benchmark 10 - year Treasury
yield topped 3 percent for the first
time in more than four years on Tuesday, a milestone that reflects the durability of the U.S. economic expansion and stokes the view the three - decade - old bull market in
bonds is numbered.
Traders keep pushing
bond yields and the loonie higher, but Stephen Poloz and the governors still aren't convinced that good
times are back
«The Canadian dollar and
bond yields remain near levels observed at that
time.
Bond yields rose and stocks slumped after an unexpected rise in consumer inflation to its fastest pace in a year, making it more likely the Fed will raise interest rates three or more
times this year.
CIBC's Avery Shenfeld, however, notes that Canadian
bond yields could move the opposite way this
time.
For the first
time ever, the average 10 - year
bond yields of the «G3» — the U.S., Japan and Germany — are now trading below 1 %.
In the meantime,
bond yields have drifted higher and jumped shortly after 2 p.m. ET, finally pushing the 10 - year over 2.6 percent for the first
time since mid-December.
As I've explained many
times before, gold has historically had an inverse relationship with
bond yields, performing best when they're moving south.
More from The New York
Times: For
Bond Investors, Low Expectations in a Low -
Yield World Emerging Market
Bonds Are on a Roll.
One of the best coincident and real -
time indicators of bursting bubbles and recessions is the
yield spread between US high -
yield corporate
bonds and the 10 - year US Treasury.
With stocks trading near all -
time highs and
bond yields still relatively low, some investors have turned to alternative asset classes.
The Financial
Times reports that $ 20 billion in dollar - denominated
bonds issued by HNA and its subsidiaries are due to mature in 2018 or 2019;
yields on three of those
bonds have spiked, doubling this month to more than 18 %.
Second, the average
time to maturity on U.S. debt is six years, meaning that most of the low -
yielding bonds now on the books will be exchanged for more expensive debt over the next decade.
Markets around the globe are keeping a close eye on the U.S.
bond market after the
yield on the 10 - year Treasury note topped 3 percent on Tuesday for the first
time in several years.
The market's price action since late January hasn't been inspiring, and with
bond yields up, commodity prices higher and sharp price moves among equities, it might be
time to break out the bear suit.
Demand for U.S. Treasurys in recent days helped push both the 10 - year and 30 - year
bond yields to near their all -
time lows Thursday, July 12.
But a continuation of favorable economic growth and low default levels — which we expect — and measured Federal Reserve tightening — which we also expect — should support more narrow high -
yield bond spreads for some
time to come.
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.
The 35 year bull market in
bonds most likely ended on July 8, 2016 when the 10 year maturity U.S. Treasury Note
yield hit an all -
time low of 1.36 %.
Demand for 10 year
bonds pushed their
yields below the significant 3.00 % level for the first
time this year.
For the first
time ever, Switzerland's entire stock of
bonds has fallen below zero, with the 50 - year
yield plummeting to negative 0.03 percent on July 5.
Bond yields rose while stocks fell on the ECB news, while the Great British Pound stood out with a strong performance, rising above 1.40 against the USD for the first
time this month after a reported «breakthrough» on the Brexit talks regarding the transition with the EU.
Elsewhere, at the single country and asset class fund levels, High
Yield Bond Funds recorded their ninth consecutive outflow while Inflation Protected
Bond Funds took in fresh money for the 10th
time in the 11 weeks, year - to - date.
Italy's 10 - year
bond yield climbed above 2 percent for the first
time since September 2015.
In the credit markets, both investment - grade and high -
yield corporate
bonds had negative returns for the first
time in eight quarters, with down - in - quality subsectors in each unconventionally outperforming higher quality ones.
Appetite for riskier assets such as stocks and high -
yield bonds has been suppressed by a number of factors that have come up around the same
time, but the headwinds may be transitory, according to the New York - based investment bank.
A high quality muni -
bond portfolio can
yield close to 4 % tax free, with inflation essentially not existent and equities at an all
time high I'm curious if there is a flaw in my logic?
Cash more liquid but
bonds you'll get a better
yield and more of a flight to safety during the down
times (usually).
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.
«We are hoping «mom and pop» can do a little bit better than the
bond market at a
time of historically low
yields.»
Junk -
bond ETFs rallied on Wednesday, as markets breathed relief that the «fiscal cliff» is no longer a concern and as a result,
bond yields are under 6 percent for the first
time ever, and junk ETF share prices hit levels not seen in years in some cases, according to an article on ETF Trends.
We believe it's
time to rethink how to diversify, as
bond yields are rising and U.S. Treasuries» inverse...
Western allies press Trump to maintain nuclear deal with Iran: Reuters US intelligence monitors Iranian cargo shipments into Syria: CNN A trade war is a major risk for China's debt - ridden economy: CNBC Federal judge orders gov» t must accept new DACA immigration applications: WaPo Unification of Koreas still unlikely as leaders prepare to meet: Reuters US Consumer Confidence Index rebounded in April after March decline: CB New home sales in US increased to 4 - month high in March: MarketWatch Richmond Fed Mfg Index turns negative for first
time since 2016:
Bond Buyer S&P Case - Shiller Home Price Index surged in Feb, up 6.3 % y - o - y: CNBC Federal Housing Finance Agency: US house prices continued to rise in Feb: HW Corp
bonds with lowest investment - grade rating look vulnerable: Bloomberg 10 - year Treasury
yield reaches 3.0 % for first
time since 2014: CNN Money
At the same
time, some 70 per cent of government - issued
bonds are
yielding 1 per cent or less, and when you combine the equity /
bond value of the 15 largest global markets they've never been more expensive.
Meanwhile, the
yield on Switzerland's 50 - year government
bond fell below zero for the first
time on Tuesday, according to Reuters.
Tactically, now may be an appropriate
time to consider taking on more interest rate risk; nominal
yields on government
bonds look attractive and we believe can persist through the quarter.
«Every
time the
bond market moves dramatically and unexpectedly higher in
yield, the consensus forecast plays catch - up,» says Matthew Hornbach, Global Head of Interest Rate Strategy for Morgan Stanley Research.
But since the 10 - year
bond yield declined from 2.85 % to 2.75 % after the 5 % stock market drop, and futures were signaling another 5 % drop in the stock market, I figured it was
time to deploy some significant cash.
This initiated a further decline in 10 - year government
bond yields, which fell to all -
time lows for nine large euro area countries including France, Ireland and Spain by 26 November, the end of the period under review (Graph 5, right - hand panel).
For the first
time in history, some government and corporate
bond yields have ventured below zero.
The three - year - maturity
bond with an annual
yield of 8.33 % was more than four
times oversubscribed.
The
yield on the 10 - year Treasury
bond climbed above 3 % for the first
time since 2014, but of greater concern to many market participants were remarks in major corporate earnings reports suggesting that business conditions had likely hit their peak and were poised to deteriorate going forward.
High
Yield Bond Funds posted outflows for the 13th
time in the past 15 weeks, with the latest redemptions the biggest since early March, while Emerging Markets
Bond Funds recorded their largest outflow since the second week of February.
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.
As Wolf Richter pointed out for Wolf Street earlier this month: «Since mid-December 2016, the Fed has hiked rates four
times, in total by 1 percentage point, but over the same period, junk
bond yields rated CCC or below have declined 1.5 percentage points as the
bonds have rallied.»