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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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Credit Casino Paying Off For Investors |
Forbes.com - April 4, 2010 - by Matthew Craft
Far fewer corporate borrowers are bilking their creditors (that's you)
Buying corporate bonds carries an implied wager: you hand over your savings in return for a nice yield, currently 8.4% for risky, low-rated debt, and hope the company remains healthy enough to keep making its interest payments. That bet is one that investors have been winning.
Moody's Investors Service counted only 16 corporate borrowers worldwide that missed interest payments in the first three months of 2010, the rating agency said Wednesday. In the same period a year ago, with financial markets still in turmoil, 90 companies bilked their creditors. Moody's says the global default rate for low-rated bonds has dropped to 9.9%, a fall from the 13% rate posted at the end of 2009.
Moody's expects the rate to hit 2.8% by the end of this year, then fall further. A better outlook for defaults diminishes one of the largest risks to bond buyers, an ever-expanding group that includes pension funds, corporate treasurers and average workers saving for retirement.
Companies are finding it easier to handle their debts thanks to a stabilizing economy and a wide-open bond market, says Kenneth Emery, Moody's Director of Default Research. That's not to say the economy is strong, Emery cautions. Consumer spending and housing data, for instance, appear good one month and weak the next. But the unemployment rate, now at 9.7%, hasn't climbed. "We're no longer talking about how far economic activity will fall," he says. "Certainly, there's wide agreement that we have stabilization."
As a result, investors are more willing to take on risk, Emery says. There's a virtuous circle at work: people become confident they won't lose their savings and lend companies more money through corporate bond markets. With access to credit, fewer companies fail, and a falling default rate encourages investors to put more money into credit markets.
Sales of high-yield or "junk" bonds set a record in March, as Frontier Communications ( FTR - news - people ) and Lyondell Chemical led corporate borrowers in raising $38.8 billion worldwide, according to data provider Dealogic. By some estimates, roughly 75% of that $38.8 billion has been used to pay off other debts. "Companies with debt coming due have found their ability to get refinancing has really increased," Emery said.
As long as the markets remain open and the economy continues to gain strength, the $1.4 trillion in corporate debt coming due over the next five years may prove manageable, Emery says. (See "Corporate Credit: Apocalypse Not.")
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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