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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
|
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)
|
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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Corporate Bond Spreads to Narrow, Schroders Forecast |
By Shelley Smith and Tom Kohn
Sept. 15 (Bloomberg) -- Corporate bond spreads will narrow further after stimulus packages and cuts to borrowing costs created a “virtuous cycle,” according to Schroders Plc, the U.K.’s second-biggest money manager by market value.
“The collective central bank effort has succeeded in stemming the tide of disaster that was impending,” Karl Dasher, Schroder Investment Management Ltd.’s global head of fixed income, said in phone interview from Hong Kong today. “Base rates are so low that companies are able to recast their capital structure at a very low cost. It’s created a virtuous cycle that’s allowing a strong market despite the macro-economic headwinds we’ve faced.”
A rally in corporate bonds has sent the extra yield investors demand to hold investment-grade securities rather than similar-maturity government notes to the lowest since June 2008, according to Merrill Lynch & Co.’s Global Corporate Bond index. The spread narrowed to 217 basis points from a record 511 basis points on March 3, the index shows.
While the rally’s pace will slow “if history is a guide,” spreads will narrow by between 35 basis points and 40 basis points a year for the next two to four years, Dasher forecast. A basis point is 0.01 percentage point.
Interest Rates
Governments worldwide have announced about $2 trillion in economic stimulus programs while central banks around the globe cut borrowing costs to record lows. The Federal Reserve kept its interest rate to a target of between zero and 0.25 percent and the European Central Bank left interest rates this month at a low of 1 percent for the fourth time since May 6.
Investment-grade bonds are rated Baa3 or above by Moody’s Investors Service or BBB- or above by Standard & Poor’s.
“The sectors and regions that have withstood the storm the best have been those that were tested in the last decade,” Dasher said. “Asia being tested in the late 1990s and telecom and technology companies being tested during the early part of this decade meant they made a lot of fundamental changes that put them in a good position this year.”
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| Stuff to look at |
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S&P Commentary and Newsletters: S&P
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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