Not exact matches
So, it is a very different
market than it was 10 years ago, and you're
going to see a lot of corporate bond issuance as these infrastructure projects
go out there, and you can capture some pretty good
yields and you know what you're buying because it's a corporate bond.
Persistence will remain a key feature of
markets going forward, as will the reach for
yield, we believe.
In the chase for more return with less risk, one
market watcher
went yield hunting on the S&P 500.
«If you
go back to 1999 and 2007, the
yield curve was flattening for a year while the stock
market was
going straight to the moon, and that's exactly what we're having now,» said Maley.
Additionally, in a bear
market, if the fundamentals of a security remain strong but the
market price declines, then
yields go up.
yields will hit the highs on close end of the day... equity
markets setting up to be slammed tomorrow maybe but today they have run over weak shorts in the face of rates... the federal reserve see's this and again will wonder if they are behind on hikes, strong data, major expansion in credit, lack of wage growth rising bond
yields and ballooning debt... rates will
go much higher and equities will have revelations as to what that means for valuations
For instance, the U.S. high
yield market, as measured by the Barclays U.S. Corporate High Yield 2 % Issuer Capped index, experienced its worst start to a year ever, going back to 1994, Bloomberg data
yield market, as measured by the Barclays U.S. Corporate High
Yield 2 % Issuer Capped index, experienced its worst start to a year ever, going back to 1994, Bloomberg data
Yield 2 % Issuer Capped index, experienced its worst start to a year ever,
going back to 1994, Bloomberg data show.
When bonds
yield 1.75 % for investment - grade bonds, then it's difficult to turn that into a 5 % -10 % return
going forward... If he wants to argue against that, and talk about Dow 5000 and bear and bull
markets, then he's welcome to, but he's pushing at windmills in my opinion, and he belongs back in his ivory tower.
This leaves us roughly in the same position that we started the year, slightly overweight to spread product, i.e., investment - grade and high -
yield corporate bonds and emerging
markets (more recently, we also
went back to a slight overweight on commercial mortgage - backed securities).
The good news is that the European Central Bank and the Bank of Japan will continue to pump a fair amount of liquidity into the
market, and foreign investors are
going to continue looking for
yield.
And I think that given higher volatility in the
markets,
going into higher
yielding bonds or stocks, the risker ones, is unadvisable.
Knowing that
market predictability is all a guess, all I can really do is diversify my investments among companies that sport safe and reliable
yields all the while simply holding and averaging down my cost should prices fall dramatically and make monthly buys no matter what's
going on in the world or
market.
As you can see in the chart below, one of the portfolio's strengths is the freedom it has to
go beyond traditional sources of income and pursue nontraditional income sources — such as ETF exposure to bank loans, preferred stock, and emerging
market debt — in order to seek
yield.
And since the
market is pricing these stocks at the «3 %
yield» you mention, the stock price
goes up in tandem to price the shares accordingly.
The speech
goes on to outline some of the economic surprises that came to pass in the intervening years, including: the «mining boom mark II»; the further significant rise and then subsequent fall in Australia's terms of trade; and the search for
yield in global capital
markets driven by ongoing ultra-easy monetary policy in the major economies.
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.
Considering the paltry
yields in most corners of the fixed - income
markets, avoiding commissions for investors looking to reduce interest rate risk by
going into funds like (NYSEArca: FLOT), (NYSEArca: ISTB) or (NYSEArca: SHY) will definitely help a lot.
«The proverbial «best house in a bad neighborhood» award
goes to US high
yield, where we see base case total returns of 5 %,» says Sheets, adding that credit selection should be a source of significant alpha in nearly all global
markets.
So with that said, if you know of a problem that a particular industry is
going through, and if your financial product can alleviate that problem, that would
yield a better return on investment from your
marketing campaign.
Spanish ten - year
yields yesterday
went above 6 %, in a sign that the
markets are becoming wary of the seeming complacency of the Spanish prime minister; there is now a sense that he might not apply for a programme before next month's regional election — and maybe not at all;
Composite Treasuries Sentiment: Taking a broader view of bond
market sentiment (our composite bond
market sentiment indicator combines the signal from futures positioning, fund flows, implied volatility, and global bond
market breadth), it's readily apparent that bond
market sentiment has seen a reset from relatively stretched bearishness to just on the bullish side of neutral (i.e. the indicator is saying participants have
gone from expecting higher bond
yields to expecting lower bond
yields).
When the
market is chasing
yield and chasing low quality, we're
going to perform well, but less well than the
market.
Should our ongoing bull
market go from strength to strength, we can anticipate that the
yield curve will validate this message by flattening or even rising further, with shorter term
yields rising more quickly than longer term
yields.
Now we see the real weakness of a high
yield portfolio; it all
goes well when the
market is up... but it
goes horribly wrong when the
market goes down.
With the Federal Reserve pointing toward three more interest rate hikes this year, money
market fund
yields are likely to
go higher.
Not to beleaguer the ongoing developments in the US Bond
markets, but while ten years US
yield count on the Greenbacks measuring tape, the unwinding of the USD geopolitical risk premium
goes on and price action suggests we should expect... Read more
While most of the
market seemed not to notice, seeing as it was fixated on corporate earnings and what's
going on in the tech sector, the
yield on the T - note surged by 14 basis points last week to close Friday at 2.96 %.
The Fed's
go - slow approach to raising policy rates and the Bank of Japan's (BoJ's) encouragement of a steeper
yield curve have lifted
yields across major bond
markets.
But if you are
going to try to strategically manage your equity exposure, then watching how investors treat cash at any point in time might be a useful tactic (alongside monitoring dividend
yields and the average
market P / E).
But in the last few episodes of sharp stock
market drops, bonds
went up (US government bonds are a safe haven asset and appreciate in crisis periods) so the only thing better than 3 months worth of expenses in a money
market fund is having 3 + x months worth of expenses in the bond portfolio due to higher bond
yields and negative correlation between bonds and stocks.
And I said, «I wonder if you thought about framing in a different way, you know, whether it's dividend
yield or earnings
yield, when the
market goes down 20 %, 40 %, 50 %.»
And so, there is this big dichotomy I think between what the Fed governors are forecasting in terms of their so - called «dot plot,» where they think interest rates are
going to be and where the
market is again, saying well, actually we know better, bond
yields are always
going to stay low.
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.
Even so, that doesn't mean mortgage rates will
go up because mortgage rates are more tied to the 10 - year bond
yield which has been declining due to all the risk in the
markets.
After all, it is the nature of the
markets to punish consensus thinking, and I would say that the idea that deflation will persist and that bond
yields will
go down forever just might be consensus thinking.
Cash is NOT trash... It is a viable / logical investment with a 2 % +
yield that allows you to sleep soundly at night and with LIQUIDITY at the ready to deploy if / when
markets go kaflooey as the CBs, as you so elegantly put it, continue to «make it up as they
go along».
The rise in US
yields is thought to be the primary driver behind the USD resurgence, but unwinding of USD short positions, given that CFTC
market positioning was at seven years highs, also
goes a long way to explain the dynamic shift in USD sentiment.
My last trip to the
market yielded the sweetest bunch yet, so I did not want them to
go to waste!
The
yield on the 10 - year Treasury note is the best
market indicator of where mortgage rates are
going.
It's also crucial to note that TLT pays a
yield of about 4 %, so investors still get a decent return when the
market price
goes nowhere.
«Dividend
yields virtually in every
market around the world are in excess of three per cent, which is far in excess of what you're
going to get from fixed income or cash.»
For that reason, many looking at carry trading strategies will have to
go out over the risk curve and borrow in a cheap major currency in order to buy a higher -
yielding emerging
market (EM) currency in order to earn a
yield beyond that of higher - duration US Treasury bonds (considered safe
yield).
So we have a long, long way to
go for interest rates to threaten the stock
market, at least in terms of the bond -
yield / earnings -
yield model.
This means that the U.S. stock
market is
going up while the
yield curve flattens!
Maybe rates
go low enough that someone relying on them to remain above a certain level gets forced to buy into a high
market already, and put in the top for prices, and bottom for
yields.
There is plenty of anecdotal evidence for this — just read my previous post about
yield on cost, or
go to any investment show and ask people if they're beating the
market: all of them will say yes.
The moment incremental financing seems less likely or more expensive, companies that will need financing get re-evaluated by the
market — stock prices move down, bond
yields go up.
In my prior post, I gave an overview of the income options available in today's bond
market,
going over how much
yield was available from different asset classes and how to think about the risks that different bond investments carry.
Financial planner Michael Kitces notes that this is hardly the first time that retirees have faced challenging financial
markets, including long periods where bond
yields have been low and the stock
market has stagnated or
gone into a prolonged slump.
Asian
markets went into reverse on Wednesday (Apr 25), tracking fresh losses on Wall Street as investors fret about rising US Treasury
yields and speculation that interest rates will rise four times this year.