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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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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
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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
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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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)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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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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Stocks and Bonds, Parting Ways |
The New York Times - Jan. 29, 2011 - by Paul J. Lim
SINCE the financial crisis, bad news for the bond market has generally meant trouble for stocks.
That’s because equity investors have looked to corporate and foreign bonds to gauge the health of the global economy. Last spring, for example, when the debt crisis in Europe erupted — casting doubt on an economic recovery — the Standard & Poor’s 500-stock index sank more than 16 percent.
But in recent weeks, this relationship appears to have broken off.
Stocks have been rallying in the face of declines in bonds, which have been prompted in part by growing concerns surrounding the finances of local and state governments. Since the start of December, municipal, foreign and long-term Treasury bond funds have lost value, on average. And investors have yanked nearly $18 billion from their fixed-income portfolios, according to the Investment Company Institute. Yet, during that same stretch, the S.& P. 500 has risen more than 8 percent.
Why are these markets heading in different directions? It could be a sign that stock investors have grown confident enough in the health of the economy to stop taking their cues from the fixed-income market.
Consumer confidence is relatively high, and economists have started to ratchet up their expectations for economic growth. The economic forecasting firm IHS Global Insight, for example, now says it believes that gross domestic product in the United States will jump 3.2 percent this year over last year. That’s up significantly from the firm’s previous estimate of 2.4-percent.
“It’s hard not to notice that the economy is improving and companies are reporting strong earnings,” said Russel Kinnel, director of mutual fund research at Morningstar in Chicago.
Of course, there’s another — and more direct — explanation for why stocks have lately been feeding off the bad news for bonds.
“The money that’s been leaving bonds has to go somewhere,” said Mark D. Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
And the best guess is that it’s been heading into stocks. Indeed, since Dec. 1, nearly $15 billion of net new money has flowed into stock mutual funds — a stark contrast to the net redemptions that stock portfolios had been experiencing since the start of the 2008.
There’s no way to say with certainty that the money leaving bonds is being redirected into equities. But one indication, Mr. Luschini said, is the performance of big blue-chip stocks.
“If investors are going to extend out on the risk branch, what’s their next step after bonds?” he asked. “Stocks. But which type? It will probably be blue-chip, quality names that pay dividends and offer conservative investors some comfort.”
Sure enough, large-capitalization shares have been the best-performing part of the domestic stock market of late. The Dow Jones industrial average, representing shares of 30 of the country’s biggest companies, has climbed 2.1 percent since the start of the year. At the same time, the Russell 2000 small-stock index has fallen 1.1 percent.
Concerns about the health of municipal finances are just one factor that’s been driving money out of bonds.
For the complete article visit nytimes.com
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