Not exact matches
NEW YORK, Feb 5 - The dollar rose against a basket of currencies on Monday as the U.S. bond market selloff levelled off after the 10 -
year yield hit a four -
year peak on worries that the Federal Reserve might raise interest rates faster to counter signs of wage pressure.
I would argue, then, that both the maturity wall and the action in high -
yield spreads this
year suggest the credit cycle has probably already
peaked.
Both long and short - term rates retreated, sending the
yield on the 10 -
year Treasury roughly 20 basis points (0.2 percent) below its June 10, 2015
peak.
While the most extreme overvalued, overbought, overbullish, rising -
yield syndrome we define has generally appeared only at the most wicked market
peaks in history, investors have ignored those conditions over the past
year.
For example, the research shows that in the 12 months before a market
peak, U.S. 10 -
year Treasury
yields have on average widened by more than 100 basis points.
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.
The 2000
peak was accompanied by 10 -
year Treasury bond
yields over 6.5 %.
For example if you bought Vanguard High Dividend
Yield ETF (VYM), a holding in the Dividends Diversify Model Portfolios, during the market
peak of 2007 and held though summer of this
year, you would have earned about a 7.5 % annual total return including dividends.
In Australia, the
peak in the 10 -
year yield was 7.25 per cent, and the current level is 6.1 per cent.
In fact, if you look at the returns on 10
year treasuries from the time
yields bottomed in the early - 1940s until they
peaked in the early - 1980s, the drawdowns were all fairly mild.
This modestly exceeds the
yield available on a 10 -
year Treasury, but by a small margin that - outside the late 1990's bubble period - has previously been seen only during the two -
year period approaching the 1929
peak, between 1968 - 1972 (which was finally cleared by the 73 - 74 market plunge), and briefly in 1987, before the crash of that
year.
Looking at periods where the price to
peak earnings was above 19 and inflation and bond
yields were below 2.5 percent and 4.5 percent, respectively, stocks had an average seven -
year return of 6 percent.
For example, since 1950, the S&P 500 has enjoyed total returns averaging 33.18 % annually during periods when the S&P 500 price /
peak earnings ratio was below 15 and both 3 - month T - bill
yields and 10 -
year Treasury
yields were below their levels of 6 months earlier.
... the 30 -
year Treasury bond
yield has
peaked [intermediate - maturity
yields «are another story»], and that the inversion of the Treasury
yield curve that has occurred in the last few weeks could last for
years.
If it were 45 % higher, that would bring it to nearly 30, or 20 percent higher than where it was at the
peak of last
year's high -
yield debt concerns and not much lower than where it was during much of the worries about European debt in 2012.
As the Fed's stimulus program appears to have «
peaked» Citi warned investors yesterday to be cautious with the Equity markets; and recent price action across the Treasury curve suggests lower
yields can be seen and US 10
year yields are in danger of retesting the 2.40 % area.
The news pushed the U.S. dollar higher and sent the
yield for the 10 -
year Treasury note TMUBMUSD10Y, -0.63 % to a fresh four -
year peak of 2.95 %.
The form of phosphate plants can use is in danger of reaching its
peak — when supply fails to keep up with demand — in just 30
years, potentially decreasing the rate of crop
yield as the as the world population continues to climb and global warming stresses crop
yields, which could have damaging effects on the global food supply.
«Phosphate is vital for best crop
yields, but global supply is limited, could
peak in 30
years.»
High
yield option - adjusted spreads (OAS) for the
year have double
peaked, reaching highs of 907 and 883 bps on Jan. 20, 2016, and Feb. 11, 2016, respectively.
Keep in mind, 200 - basis point increases in the 10 -
year Treasury bond
yield marked the
peak in each of the aforementioned leveraging booms.
The one
year distribution
yield has fallen from a
peak of 2.5323 to 1.9445.
Credit spreads have narrowed from their recent
peak, but high
yield spreads are roughly 200 basis points wider than they were two
years ago.
Inflation
peaked in 1980 but bond
yields kept rising for another two
years.
«Over the past 25
years, every backup in
yields failed to exceed the previous backup,» which was one of the technical hallmarks of the long - term bull market for bonds dating back to the
peak in
yields in the early 1980s, Yamada said.
The S&P / BGCantor 7 - 10
Year U.S. Treasury Bond Index's
yield, which topped out at 2.47 % on July 5, was returning to its recent
peaks, closing at 2.43 %.
The S&P U.S. Issued High
Yield Corporate Bond Index is returning 0.23 % for the month while
year - to - date
peaking at a 3.34 % before dropping slightly to close the week at 3.2 % YTD.
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 you bought Vanguard High Dividend
Yield ETF (VYM), a holding in the Dividends Diversify Model Portfolios, during the market
peak of 2007 and held though summer of this
year, you would have earned about a 7.5 % annual total return including dividends.
However, investors, with an appetite to absorb somewhat higher risk and who have a view that the bond
yields have
peaked in the short term, can consider investing in this issue, but only for 3
years or 5
years.
That
year, long - term U.S. Treasury bond
yields peaked near 15 %.
Particularly for the last 35
years, more than half of stocks» real return came from rising valuations as dividend
yields tumbled off their
peak of 6.4 % in August 1982 to rest at a meager 2.1 % as of June 30, 2016.
A review of the period that began with the global financial crisis and the several
years that followed shows the RAFI high -
yield index produced approximately 7.8 % in value - add relative to the Merrill Lynch index between June 2007 and November 2008 (the
peak of the OAS spike), and only gave back 6.6 % in the form of underperformance through April 2011, when OAS spreads next bottomed.
Corporate bond defaults appear to have returned to low levels after
peaking in 2008 and 2009, but
yields on corporate debt are lower than they've been in over 40
years.
During the recession, the Canadian REIT index dropped by 2.2 % from its
peak after a 10 -
year Canadian bond
yield surge.
The bank prime rate — the analogy to Libor today —
peaked at 21 % and in November of 1981 the Treasury sold 30
year bonds with a 14 % coupon which out - performed the S&P 500 the next
year as bond
yields collapsed So much for ancient history.
If the
yield is low, we often inserts in scenarios where the earnings currently are at
peak and likely to be lower for the next 5
years.
It is worthy to note that zero coupon
yields peak out around 20
years out, and then start declining.
Or actually diminishing crop
yields, cropland productivity, as measured by kilograms of cereals per capita
year,
peaked in 1976, according to Lester R. Brown of the Worldwatch Institute.
If you refer to Section 3.7.4 you will see that it is not just Church & White that are being cited and that in Fig 3.14 Church & White data
yields the lowest SLR through this 1920 - 50 period, hitting a momentary
peak of just 2.3 mm / yr from 18 -
year lnear trend calculations.
The Tamino graph uses differing methods and
yields a
peak of 2.1 mm / yr through these
year.
William McClenney says: July 29, 2012 at 2:10 pm ``... How many realize that messing with the orbital paced variables invariably
yields peaks of ~ 100,000
years, ~ 41,000
years and ~ 19 - 23,000
years?
With that said, the CMBS market is still below the
peak of $ 233 billion seen in 2007 when real 10 -
year yields were about 2.5 percent.