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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
|
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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| 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)
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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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Credit Spreads Widen Further Than Warranted by Fundamentals |
MORNINGSTAR - Sept. 27, 2011 - By Dave Sekera
Credit spreads widen, but we don't see significantly higher credit risk.
- Federal Reserve decides to lengthen the duration of its holdings.
- Corporate credit spread volatility is driven by the ongoing sovereign-debt crisis.
- Credit spreads widen, but we don't see significantly higher credit risk.
The Federal Reserve Decides to Lengthen the Duration of Its Holdings
After its September meeting, the Federal Reserve announced its intention to lengthen the duration of its portfolio of Treasury securities by selling short-term bonds and purchasing long-term bonds. In addition, the Fed will reinvest the proceeds from agency securities back into mortgage-backed notes.
Considering this move was telegraphed to the market well beforehand, interest rates declined rapidly over the course of August. The 10-year Treasury declined over 135 basis points to under 2%, and the 30-year Treasury declined 140 basis points to under 3%. Considering the average spread in the Morningstar Corporate Bond Index has widened to +225, corporate bond investors are now generating over half of their total return by accepting credit risk.
Inflation expectations continue to be under control. The five-year, five-year-forward break-even rate has bounced between 2% and 2.75% since recovering from the credit crisis, and the absolute level has been dropping over the past few months. At 2.1%, we believe that the market is pricing in forward inflation near the bottom of the Fed's target range. This allows the Fed plenty of room to steer monetary policy in an effort to boost an economy that continues to muddle along and is dangerously close to stalling out. As long as economic activity is muted, unemployment remains in the upper-single digits, and inflation expectations don't increase, we suspect the Fed will continue to utilize all of its levers (and probably create some new ones) to provide liquidity to the economy.
For the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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