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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
|
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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What Is The High Yield Bond Spread Telling Us? |
Seeking Alpha - Oct. 13, 2011 - By Edward Harrison
Bond markets are often seen as more prescient in anticipating economic slowdowns than stock markets. Yield curve inversion has predicted every recession in the US since 1970, for example. Inverted yield curves are a leading indicator of recession because they are signs of expectations that the economy will be so negatively impacted that it will force the central bank to ease rates in the future.
During the last recession, economists like Federal Reserve Chairman Bernanke speculated that signs of yield curve flattening and inversion were not prescient because of an alleged "global saving glut".
I would not interpret the currently very flat yield curve as indicating a significant economic slowdown to come…
An alternative perspective holds that the recent behavior of interest rates does not presage an economic slowdown but suggests instead that the level of real interest rates consistent with full employment in the long run--the natural interest rate, if you will--has declined.
Given the global nature of the decline in yields, an explanation less centered on the United States might be required. About a year ago, I offered the thesis that a "global saving glut"--an excess, at historically normal real interest rates, of desired global saving over desired global investment--was contributing to the decline in interest rates.
-Ben Bernanke: Reflections on the Yield Curve and Monetary Policy (Before the Economic Club of New York, New York, New York, March 20, 2006)
This perspective proved false when recession did come late in 2007.
Bloomberg is running a story that indicates this same inverted curve harbinger may be at play again:
The so-called Treasury yield curve, adjusted for distortions caused by the Federal Reserve’s record low zero to 0.25 percent target interest rate for overnight loans between banks, shows that two-year notes yield 20 basis points, or 0.20 percentage point, less than five-year notes, according to Bank of America Corp. research. The unadjusted gap of 79 basis points at the end of last week indicates the chance of recession at about 15 percent.
I am a bit sceptical of this ‘adjusted’ curve talk. Nevertheless, the data have weakening.
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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