If you could look at high
yield bond trades you would have seen that they were declining as well.
Most investors couldn't see both the high yield bond market and the ETF market, but if they could they would see that the high yield ETF was reflecting the price drops in individual high
yield bond trades.
Not exact matches
LONDON, May 1 - The dollar broke into positive territory for the year and
bond yields were creeping higher again on Tuesday, as the recent rise in oil prices fuelled bets that the U.S. May Day holidays across Asia and Europe meant
trading was thinner than usual, though there was more than enough news flow to keep those...
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.
Exchange -
traded funds that track high -
yield bond indexes have been the beneficiaries of a cash surge in recent weeks.
While I don't presume to read traders» (or
trading computers») minds (see Barry ritholtz» note this morning about ex post facto rationalizations), generally speaking there is concern that the «taper» of long term
bond purchases will cause
bond yields (the percent of interest paid on them) to rise.
The average BB rated
bond, which is what Dell's current debt is rated, is
trading at a
yield of 5.8 %.
Exchange -
traded funds that track high -
yield bond indexes have been the beneficiaries of a cash surge in recent weeks as market participants figure the central bank probably won't raise rates in 2015, and it could be well into 2016 before anything happens.
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.
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 %.
On average, high -
yield bonds are
trading at 86 cents on the dollar, meaning the market is predicting a 14 % loss on the loans.
However, in the spring of 2013, high -
yielding stocks, which were basically
trading as
bond alternatives, got crushed.
Lewis, fund's chief investment officer, spent nine years at Citigroup as a director of the bank's global special situations group, a $ 5 billion prop -
trading group that specialized in distressed debt, high -
yield bonds, and value equity.
With stocks
trading near all - time highs and
bond yields still relatively low, some investors have turned to alternative asset classes.
Treasury
yields pull back sharply Thursday after the reemergence of
trade tensions between global powerhouses rattles investors, pushing stocks down and
bond prices up
The article makes the point that unlike most ETFs, high
yield bond ETFs often
trade at prices far from their fair value.
Trading across U.S. government
bond maturities was range - bound on Wednesday, with
yields little changed in spite of gains in the equity market in the last few sessions.
Our team of credit professionals deliver sales and
trading capabilities across a wide range of fixed income asset classes including high
yield, distressed and investment grade
bonds, convertible
bonds, public and private corporate securities, leveraged loans and emerging market debt.
We
trade all fixed income assets, with a focus on more illiquid situations, from high
yield, distressed and investment grade
bonds and convertible
bonds to public and private corporate securities and leveraged loans.
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.
European government
bond and U.S. 10 - year Treasury
yields are
trading at their highest levels in more than two months and the U.S. 30 - year Treasury
bond yield reached a high for the year on Tuesday.
Many
bonds trade at negative
yields because the European Central Bank (ECB) and the Bank of Japan (BOJ) continue to buy
bonds as part of their management of monetary policy.
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.
This convergence of
yields has implications for the behaviour of investors: with
bond yields in different countries tending to move together, investors have found it more difficult not only to diversify their portfolios but to find
trading opportunities.
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
Supported by Fear
Trade factors such as geopolitical turmoil — both in the U.S. and abroad — and low to negative government
bond yields, gold's move here can be seen as a bullish sign.
Bond ETFs saw their highest inflows in three years in April Rise in
yields attracted buyersInvestors snapped up fixed - income exchange -
traded funds in April, with the category seeing its biggest month of inflows in more than three years.
The average bid / ask spread was 29 cents (per $ 100 par value) for both investment - grade and high -
yield bonds, and the average daily
trading volume was $ 2.2 million ($ 2.5 million) for investment - grade (high -
yield) corporate
bonds.
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).
The average market impact cost was 29 basis points (39 basis points) per $ 1 million
traded for investment - grade (high -
yield) corporate
bonds.
Higher transaction costs Due to a typically large spread between bid and offer prices, and higher transaction costs associated with less liquid securities,
trading high
yield bonds can be costly.
The BofA Merrill Lynch high -
yield index is
trading at roughly 600 basis points versus government
bonds, but if energy, metals and mining is excluded, it's about 80 basis points less in terms of spread.
The average investment - grade (high -
yield)
bond trades on less than 32 % (36 %) of days over the prior six months — liquidity in corporate
bonds was considerably lower than in traditional listed equity markets.
Key risks include increasing
trade tensions and a renewed spike in
bond 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.
China's benchmark 10 - year government
bond yield traded just shy of 4 percent in early December, up almost 100 basis points over the course of 2017.
«We remember vividly 35 years ago staring at long - term impeccable
bonds trading at 15 % to 17 %
yields, thinking; «Why bother
trading, hedging and knocking ourselves out?
The outstanding
bonds of Nestlé, due to mature in 2016, began
trading at a negative
yield in February.
For example,
bonds with favorable tax treatment such as municipal
bonds can actually
trade at a
yield which is below US Treasuries.
After
trading in line with US
yields for much of 2004, movements in European and Japanese government
bond yields have decoupled from those in the US in recent months, largely reflecting the scaling back in the outlook for economic growth in both economies.
After providing double - digit returns for many years, REITs are now well off the previous highs and
trade at an estimated 15 % discount to net asset value (Source: TD Securities) and
yielding an average of 7 %, a spread of 2.75 % over 10 - year
bonds.
The main exception to this global pattern has been Japan, where 10 - year
bond yields have remained remarkably stable, generally
trading in the range between 1.7 per cent and 1.8 per cent so far this year (Graph 8).
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.
«Exchange -
traded products introduce self - reflexivity by creating a highly liquid security (listed stock) that tracks a potentially illiquid underlying instrument (e.g. high -
yield bonds, commodity futures)» (again, Cole's «Prisoner's Dilemma»).
In other words
bond traders look at the
yield of a
bond in terms of where it is
trading vs. treasuries.
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.
Domestic
bond market volatility also decreased last year with 10 - year Treasury
yields trading in a tighter - than - normal range.
Argentina's benchmark 2033
bonds rose 0.24 cent to 96.7 cents on the dollar, with the
yield trading at 8.8 percent at 3:23 p.m. New York time.
For example, one source found that, on average, high -
yield corporate bonds trade fewer than half the days each month; meanwhile, the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) trades millions of shares each
yield corporate
bonds trade fewer than half the days each month; meanwhile, the iShares iBoxx $ High
Yield Corporate Bond ETF (HYG) trades millions of shares each
Yield Corporate
Bond ETF (HYG)
trades millions of shares each day.
You have probably heard that about half of all government
bonds globally are now
trading at a negative
yield.