Not exact matches
Bond fund managers Jeffrey Aronson, Michael Vranos, and Boaz Weinstein discuss why they think high -
yield market is
showing signs of a bubble.
And the high
yield bond
market is already
showing signs of improvement.
NEW YORK, Jan 18 - U.S. fund investors pulled $ 3.1 billion from high -
yield «junk» bonds during the latest week, Lipper data
showed on Thursday, offering new warning signs about risk appetite despite global
markets» continuing triumph.
Bond
yields snapped higher, adding to their already steep gains, and federal funds derivatives
showed market expectations are moving closer to pricing in a full three interest rate hikes by December.
History
shows when the benchmark rate for everything in the economy from corporate bond
yields to mortgage rates moves by this much, this fast, the stock
market struggles in the following months.
To help you compare, we
show top high -
yield savings options alongside our best money
market accounts.
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.
For example, while high
yield spreads are considerably lower than they were at the January
market bottom, they are approximately 200 basis points (2 percent) wider than they were two years ago, as Bloomberg data
shows.
Janet Yellen and other members of the Board of Governors may want to raise rates, but the narrow
yield curve
shows markets continue to push rates down.
As bond
yields surged on Friday, high -
yielding segments of the equity
market such as utilities and REITs came under the most pressure, which
shows that it won't take much of a rise in
yields to derail their rally.
As the graph below
shows, after the QE - driven big bounce from the 2008 collapse in the financial
markets, the high
yield market has largely drifted sideways since the middle of 2010.
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.
Abeona Therapeutics (ABEO)- Data for ABO - 102 in MPS IIIA appears encouraging to me (decreases in heparan sulfate, neurocognitive benefits), initial data for ABO - 101 in MPS IIIB
showed early promise, EB - 101 in RDEB could see an expedited path to
market if the pivotal study
yields fruit, and other gene therapy candidates are soon to enter the clinic.
-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.»
Though the underlying reason for that Treasury price strength was concern about economic weakness and credit defaults, falling bond
yields do allow us to take a more constructive stance once
market internals
show evidence of improvement.
Yields rose further in late January after the release of the CPI statistics, which
showed that inflation was higher than most
market participants expected.
Two other metrics which
show the stock
market to be overvalued are the S&P 500 Price / Sales ratio and the S&P 500 earnings
yield.
Vanguard highlighted high -
yield bonds to
show how they typically perform worse than other types of bonds during a stock
market drop.
Studies
show that companies with the highest dividend
yields tend to outperform the broader
market over time.
As Japan's JGB
market has
shown for a decade, you don't need high
yields to see impressive gains in bonds.
We have seen an expansion of global high -
yield debt issuance, particularly in European and emerging
markets during this cycle (as
shown in Exhibit 1).
The graph above
shows that investors will likely be entering the next equity bear
market at the lowest level of
yields in more than 50 years.
More than 70 % of the bonds in developed -
market government bond indexes today have
yields of 1 % or lower, as the chart below
shows.
A synchronized rise in inflation expectations, reflected in rising bond
yields,
shows markets are growing more confident that global inflation has finally hit bottom.
According to Bloomberg analysis, junk bonds
showed cracks last week, suggesting a more serious algorithmic spasm in equity
markets could infect high -
yield bonds.
Treasury
yields closed the session on one - week highs, as the ADP employment report
showed a robust labor
market, which bodes well before Friday's government release, while the relief rally is risk assets also pushed
yields higher across the curve, despite the slight miss in the ISM services PMI.
Below are some key takeaways from Ciatti's participation at the
show: The global wine
market feels in balance — Although certain
markets are experiencing harsh weather and low
yields, global production...
The whole Fiat Chrysler tie - up is
yielding all sorts of mongrel variations on a theme, and the Fiat Viaggio — which Fiat are teasing ahead of its Beijing Motor
Show debut — is another example of new clothes for new
markets.
The graph
shows a range of corporate bond maturities and the level of
yield available in the
market.
Fixed income sectors
shown to the right are provided by Barclays and are represented by the following Bloomberg Barclays Indices — Treasury Inflation Protected Securities: U.S. Treasury Inflation - Protected Securities (TIPS) Index; Floating Rate Loans: US Floating - Rate Note Index (BBB); Asset - backed securities: US Asset - Backed Securities Index; High
Yield: US Corporate High -
Yield Bond Index; Convertibles: US Convertible Bond Index; Mortgage - backed securities: US Aggregate Securitized MBS Index; Broad
Market: US Aggregate Bond Index; Municipals: Municipal Bond 10 - Year Index; Investment Grade Corporates: US Corporates Index
For example, while high
yield spreads are considerably lower than they were at the January
market bottom, they are approximately 200 basis points (2 percent) wider than they were two years ago, as Bloomberg data
shows.
Yields show the average seven - day
yield for money
market mutual funds in the category.
In our paper «A Case for Dividend Growth Strategies,» we compared dividend growth strategies to high - dividend -
yielding strategies and concluded that dividend growers, which tend to be higher quality companies, have generally
shown greater resilience in unsteady
markets and could address concerns about dividend stocks in a rising - rate environment, to some extent.
Minneapolis, MN: Freddie Mac today released the results of its Primary Mortgage
Market Survey ® (PMMS ®),
showing fixed mortgage rates pulling back and following bond
yields lower after gradually moving higher over the past month.
This would have been a good blog to add a visual... e.g. a long - term graph to
show how dividends
yield more of a return with a low
market...
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.
By sticking to companies that have the means to pay high dividend
yields, you not only get the added bonus of a regular paycheque from your portfolio (now electronically deposited in your investing account), but studies
show that you'll likely enjoy a higher rate of return over the long run than the
market typically provides.
Professor Robert Shiller has
shown that the dividend
yield has predictive power in terms of the stock
market as a whole.
It
shows that the recent stock
market decline has pushed the earnings
yield above 10 percent.
In the credit
markets, spreads on the high
yield securities are approaching historically tight levels, while key credit metrics such as leverage and coverage ratios are
showing signs of weakening.
On Monday, April 23, the
markets continued their slide as the ten - year Treasury
yield settled just below 3.0 %, in spite of the preliminary readings of the April manufacturing and services PMIs both
showing increases and March existing home sales rising 1.1 %, beating analyst expectations.
Note: Using the above
yield curve as an example, it should not interpreted to say that the
market believes that two years from now the short - term interest rates will be 2.7 % (the two - year
yield as
shown above).
Many people make the mistake of replacing bonds with preferred shares in their portfolio for the increase in
yield, but as the charts above
show that is a grave mistake as it exposes you to a lot more downside in the event of a
market drop.
As usual, yen pairs were taking directional cues from bond
yields, so the yen got swamped by sellers on Monday when bond
yields rose, due to the prevalence of risk - appetite and expectations that the FOMC minutes will
show that a December rate hike is still in the cards,
market analysts say.
The divergence between CDS spreads and actual high
yield bond
yields show that the bond
market has not followed CDS spreads movements due to the appetite for
yield supporting the high
yield market and pushing bond
yields down.
Fixed income sectors
shown above are provided by Barclays and are represented by — Broad
Market: U.S. Aggregate Bond Index; MBS: U.S. Aggregate Securitized - MBS Index; Corporate: U.S. Corporates; Municipals: Muni Bond 10 - year Index; High
Yield: US Corporate High
Yield Bond Index; TIPS: Treasury Inflation Protected Securities (TIPS).
Avigdor says research
shows that the correlation between rate increases and stock
markets is positive until the
yield on 10 - year U.S. Treasuries reaches 5 %.
This is not very encouraging but still, with units
yielding about 10 % and the distribution growing about 9.5 % annually, Mr.
Market still seems to be penalizing us unitholders, perhaps because of management's poor
showing in 2008/2009.
Below is a table
showing some of the major players with respective
market capitalization, revenue, P / E, dividend
yield and ROIC.
Exhibits 1a and 1b
show the monthly roll cost of the S&P 500 VIX Short - Term Futures Index in the months when high -
yield and emerging
market bonds posted losses between February 2006 and April 2007.