Category Archives: Fixed Income

The Best of Times and the Worst of Times

Since roughly the beginning of May, U.S. interest rates have been in an uptrend, with the 10 year Treasury note ending last week at a yield of 2.5%. Equity markets, not surprisingly, have reacted by weakening, especially in last week’s trading. Some of us of a certain age will admit to a degree of bewilderment Read more […]

Risky Assets, Safe Havens, or Lost Identities?

All commodities in the S&P GSCI and the DJ-UBS CI crashed on June 20, 2013, losing 3.1% and 3.0%, respectively, after the Fed declared the U.S. economy was expanding strongly enough for the central bank to begin slowing the pace of its bond-buying stimulus later this year.  This is generally bad news for commodities since historically Read more […]

Anticipation, It’s Making Me Wait

And waiting is exactly what the markets did for most of Wednesday, right up until the 2 p.m. press release from the Federal Open Market Committee (FOMC) meeting. Following the press release, markets sold off on confirmation that economic activity has been expanding at a moderate pace. As the release stated, “Labor market conditions have Read more […]

Fed Meeting Report due tomorrow, Hints Bernanke will step down in January 2014

The Federal Open Market Committee — the Fed’s policy making unit — meets today and tomorrow.  Recent reports show the economy expanding, but not accelerating. Housing starts and consumer prices both slightly weaker than expected in today’s reports.  Given this and recent misplaced fears that the Fed was about to end QE3, most analysts look Read more […]

Bank loan tracked by the S&P/LSTA U.S. Leveraged Loan Index is down 0.34% so far in June while high yield bonds are down 1.51%.

U.S. Treasury Bonds: Treasury notes and bond as measured by the S&P/BGCantor US Treasury Bond Index started the year in negative territory, finally getting their head above water on a consistent basis around the beginning of April.  The positive returns did not last long as they slipped into negative territory on May 13th and have Read more […]

Shorter Duration Munis Hold Up While Longer Duration Munis Tumble

Duration is everything in a rising interest rate market. Short term municipal bonds have fared better than their longer term counterparts as money moves out of bond funds. The S&P Short Term AMT-Free Municipal Bond Index has seen its weighted average yield remain fairly steady and has recorded a modestly down June so far of Read more […]

Senior Loans & High Yield Bonds

Duration is everything in a rising interest rate environment.  Senior loans, as tracked by the S&P/LSTA U.S. Leveraged Loan 100 Index are down 0.34% month to date. These floating rate below investment grade loans have seen their weighted average yield rise by 19bps since May month end.  Meanwhile, fixed rate high yield bonds tracked in Read more […]

High Yield Bonds See Yields Continue to Rise

High yield corporate bonds as tracked by the S&P U.S. Issued High Yield Corporate Bond Index have seen yields rise about 56bps since month end May driving a negative total return of 1.38% so far for June 2013. High yield municipal bond yields have risen by 30bps in the same time period as the S&P Read more […]

S&P Dow Jones Fixed-Income Commentary: Mixed Signals as Rates Rise

Chairman Ben Bernanke has tried to be cautious in scripting a message to the markets, but recent communications out of the Federal Reserve have been mixed.  With seven members of the Board representing 12 districts and past members all speaking to the press, the message can get convoluted at times.  The planning and timing to Read more […]

High Yield Munis Still Cheaper Than Corporate Junk

U.S. Municipal Bonds: (Data as of May 16,2013) Corporate junk bond yields have risen as mutual funds have seen outflows. Meanwhile, municipal high yield bonds have held their own. A rare twist in the markets may be ending as a result: yields of tax free high yield municipal bonds are 34bps higher (Yield to Worst) Read more […]