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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
|
3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
|
3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
|
636.26 |
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S&P U.S. Preferred Stock Index (TR)
|
1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
|---|
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Tax-Exempts Draw Value Investors as Yields Outpace Treasuries: Muni Credit |
Bloomberg - Jan. 18, 2011 - by Brendan A. McGrail
Investors who usually buy taxable securities may purchase tax-exempts as yields on top-rated tax- free municipal bonds due in 10 years have risen about six times faster than comparable U.S. Treasuries this year.
Rates on state and local government debt maturing in 2021 climbed to 3.48 percent yesterday, the highest since June 22, 2009, according to a Bloomberg Valuation index. The yields have jumped 40 basis points this year, compared with 7 basis points in 10-year Treasuries, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.
The underperformance of munis pushed rates on 10-year bonds to 104.9 percent of U.S. debt on Jan. 14, the highest ratio since Nov. 17, Bloomberg data show. The yield on 30-year debt reached 112.9 percent Jan. 14, the most since Aug. 31.
“When ratios get this high it just brings in more buyers, crossover buyers and shrewd tax-exempt buyers,” Alan Schankel, director of fixed-income research for Janney Montgomery Scott LLC, a Philadelphia-based money-management firm, said in a research note yesterday. “Value buyers are likely to step into the muni markets this week.”
Investors have pulled more than $16 billion in assets from municipal mutual funds in the last nine weeks, according to data from Lipper FMI, a Denver-based research firm. The redemptions force funds to sell securities to pay investors, driving up yields.
“The demand side is a bit weaker with people taking money out of bond funds and credit concerns,” said Tom Dalpiaz, senior vice president at Advisors Asset Management Inc. in Melville, New York, managing $250 million in municipal debt. “That’s creating value.”
Whitney’s Warning
Meredith Whitney, the banking analyst and chief executive officer of Meredith Whitney Advisory Group, spoke Dec. 19 on CBS Corp.’s “60 Minutes” about the possibility of a “spate” of defaults among local municipalities triggered by states’ fiscal stress in 2011. Dalpiaz called the claim “unfounded.”
A 30-year bond backed by Harvard University, whose credit is top-ranked by the three major credit rating companies, traded yesterday at an average yield of 5.04 percent, according to Municipal Securities Rulemaking Board data.
At the highest tax bracket, that equates to a 7.75 percent taxable yield, Bloomberg data show. A taxable Treasury maturing in 2041 yielded 4.56 percent yesterday.
A corporate bond from top-rated Johnson & Johnson due in September 2040 yielded 5 percent yesterday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
For the complete article.
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| Stuff to look at |
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Income Security Recommendation January 2013 Issue.
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