If we turn back the clock to before the recession, we find that US debt levels weren’t this high, and unconventional programs like quantitative easing helped the economy recover from the Great Recession.
A few days before the US Senate approved its own version of the Tax Cuts and Jobs Act, 137 economists signed an open letter supporting the proposed bill.
The proposed US tax reform bill, or the Tax Cuts and Jobs Act, received approval from the US Senate on December 2. There was a vote of 51-49 in the Senate.
Green bonds carry the same risk-return profile as conventional bonds. However, these bonds fund projects focused on energy efficiency, clean water, transportation, biodiversity, and sustainable waste management.
Throughout this series, we’ll look at potential risks facing markets, and how they could impact global financial markets in the short-to-medium term if they end up materializing.
After three weeks of continuous falls, US bond yields rose in the week of September 10. The benchmark ten-year US Treasury yield (BSV) rose by 10 basis points to 2.20% but remains far from the December 2016 high of 2.64%.
Yellen’s financial outlook remained upbeat, but she pointed to the availability of substantial amounts of capital and liquidity in the banking system as potential vulnerabilities.
Apprehensions over climate change, an emphasis on global pension funds over the integration of ESG in their investments, and new markets will fuel demand for this type of bond.
Equity markets trended lower after the Fed’s March meeting minutes were reported. In the minutes, some FOMC members sound concerned about the rise in equities.
Gold and oil are good hedges against inflation. While gold usually outperforms, if inflation rates rise along with interest rates, it might gain as much.
A short-term corporate bond offers investors with a lower risk profile to invest in fixed income securities with intermediate or short-term maturities.
Scotiabank points out that the only other point at which the Fed raised rates in a low-inflation environment was in 1986 when rates were increased to help defend a sharply depreciating U.S. dollar. It was one of the rate-rising periods when gold performed well. This is shaping up to be a similar period demonstrated by […]
Scotiabank points out that the only other point at which the Fed raised rates in a low-inflation environment was in 1986 when rates were increased to help defend a sharply depreciating U.S. dollar. It was one of the rate-rising periods when gold performed well. This is shaping up to be a similar period demonstrated by […]
Scotiabank points out that the only other point at which the Fed raised rates in a low-inflation environment was in 1986 when rates were increased to help defend a sharply depreciating U.S. dollar. It was one of the rate-rising periods when gold performed well. This is shaping up to be a similar period demonstrated by […]
The US investment-grade credit bond market and the high-yield bond market have been on the rise since interest rates around the world have been declining.
The possibility of a 25-basis-point rate hike in December is quite high since Donald Trump was elected president, and the markets are already pricing in a hike.
Treasury yields witnessed a secular rise in October. Except for yield on the one-month Treasury bill, which remained flat month-over-month, all other tenors saw a visible rise in yields.
Ray Dalio doesn’t see abrupt crisis Back in 2007, Ray Dalio’s economic principles template “signaled that we were in a bubble and a debt crisis lay ahead.” However, Dalio doesn’t “see such an abrupt crisis in the immediate future.” He has provided two reasons he holds this belief. “Most economies are near the mid-points of the […]
In the current market environment, duration risk has risen across bond markets (BND) (LQD). When interest rates rise, bonds with a higher duration will likely be affected more.
Jeffrey Gundlach believes that the current regime of low interest rates is going to change, and he warns investors that this change won’t be friendly to bonds.
The December 2015 rate hike was the first since the 2008 global meltdown. Now the Fed is hinting at the first rate hike of the year to come in December 2016.
Many economists agree that the United States needs to shift from a reliance on monetary policy to more fiscal stimulus, but it is not clear that the political stars are aligning to do so…
Popular overweights like emerging markets debt (EMB), US credit, and gold (IAU) have the potential to provide higher income and diversification benefits.
The uncertain global environment created after the Brexit vote made investors hope for a perpetual low rate environment. The prospect of further easing from central banks in the developed markets has spurred strong demand for government debt.
Janet Yellen said at the Jackson Hole Economic Symposium that the monetary policy toolkit available prior to the Great Recession was capable of handling the situation then.
Analyzing last week’s most significant ETF inflows in the context of our entire ETF universe, we note that investors continued to move capital into emerging markets.
Investment-grade bond yields rose marginally last week after the minutes from the July 26–27, 2016, Federal Open Market Committee meeting were released.
Janus Capital’s (JNS) Bill Gross recommends investors look at real assets like land, gold (GLD) (GDX), and tangibles if and when available at a discount.
Most central bankers view low interest rates and extended rounds of asset purchases or quantitative easing programs as the ultimate tools to spur growth and inflation in the economy.
Singer’s latest assessment of the market is bold. He said that “Everyone is in the dark, experience doesn’t count much, and extreme confidence may be fatal.”
Deep-pocketed central bankers are the biggest players in the bond market currently—a bubble and sudden collapse in the bond market doesn’t seem likely.
According to the Bloomberg US Treasury Bond Index, US government debt has returned 5.4% in 2016. Global investors are flocking to the US debt market (LQD) (AGG), primarily due to negative yields in Europe and Japan.
Investment-grade bond yields fell last week after disappointing advance retail sales data and factory gate prices lowered the expectations of an interest rate hike by year end.
Low rates force investors to take on more risk We are beginning to witness, once again, the unintended consequences of monetary policies that have remained too easy for too long. Because of extremely low rates, bonds no longer fulfill their historic purpose of capital preservation and portfolio security. A Wall Street Journal article by Timothy […]
Equity markets barely reacted to the Fed’s July policy statement released on July 27, 2016. The S&P 500 index was weighed down by consumer staples and Coca-Cola.
Investment-grade bond yields fell last week. Foreign investors found US corporate bonds appealing due to negative yields in other major developed nations.
Investment-grade bond yields rose after upbeat US inflation and retail sales data raised hopes that the Fed would hike interest rates by the year’s end.
US equity markets have recovered from the declines on Monday, June 27, 2016. But money is flowing into safe havens as investors are remaining cautious.
Alcoa aimed for an investment grade credit rating for its value-add company while maintaining a strong non-investment grade rating for the upstream company.
The Brexit vote may prompt the Federal Reserve to delay its rate hike due to a slowdown in global economic growth, particularly in emerging markets, and slowing labor growth in the United States.
Investment-grade bond yields rose marginally for the week ending June 17. Corporate bond yields, as measured by the BofA Merrill Lynch US Corporate Master Effective Yield, rose 1 basis point on June 17 to end at 2.99%.
Mohamed El-Erian, chief economic adviser at Allianz, isn’t happy with US monetary policymakers. He said that Fed officials “don’t have a vision” regarding the direction of the US economy.
In the week ended June 10, movements in the global government bond market drove investment-grade bond yields. The ten-year Treasury yield fell to its lowest point since May 2013.
The spread between high-yield bonds and ten-year Treasuries was high over the past three years, enough to lure investors to corporate bonds and away from equities.
Last week, the spreads were down by 2 basis points and ended at 1.5% on May 27, 2016. Meanwhile, the spreads are down by 19 basis points on a YTD basis.
Investment-grade bond yields fell slightly for the week ending May 27 after Fed Chair Janet Yellen stated that a rate hike would be appropriate in the coming months.
Alcoa (AA) is aiming for an investment-grade credit rating for its value-add company while maintaining a strong non–investment-grade rating for the upstream company.
Investment-grade bond yields jumped in the week ending May 20 as the FOMC (Federal Open Market Committee) minutes indicated that the Federal Reserve may go ahead with a rate hike in June.
