More on Related Themes
2014-11-27 00:00:00 Pick and Mix: Fresh Ideas for Diversifying Bond Exposure by John Taylor of AllianceBernstein
Policy backdrops and growth trajectories around the world are showing increasing signs of divergence. Yet many bond investors continue to congregate in a few selected pockets of the fixed income universe. In our view, its a perfect time to reconsider diversification tactics.
2014-11-05 00:00:00 QE Worked, But Not As Advertised by Zach Pandl of Columbia Management
Last week the Federal Reserve announced the end of its bond-buying program, which has been running with only brief interruptions for the last six years. Besides its ultimate size and duration, the striking thing about the Feds experiment with quantitative easing (QE) is that there is still not a firm consensus on exactly how it worked. Academic economists will be busy with this question for years. But from a bond investors point of view, theres enough evidence to make a few tentative conclusions.
2014-09-30 00:00:00 Economic Atonement by Peter Schiff of Euro Pacific Capital
This Friday is Yom Kippur, the day when Jews around the world ask forgiveness for their transgressions from the year past. Rabbis remind the penitent to dwell on their sins of omission, in which they did nothing when a more thoughtful and proactive action was needed, and sins of commission, in which they actively participated in an unjust action. And while not all economists are Jewish, Gene Epstein the economics editor at Barron's, offered his thoughts on how this applies to the group.
2014-07-11 00:00:00 Why The Fed Needs You To Sell Your Bonds by Gary Halbert of Halbert Wealth Management
Today I will attempt to explain why longer-term interest rates have fallen significantly this year when almost everyone expected rates to rise. This discussion focuses on the fact that there is a shortage of Treasury securities in the marketplace today, especially in maturities of 10 years or longer. The shortage is due to a combination of factors that I will discuss below
2014-04-25 00:00:00 Income Market Insight by Payson Swaffield of Eaton Vance
Fans of NASCAR racing, and most other motorsports, know what it means when the yellow flag is being waved: proceed with caution. For investors in today?s credit markets, we believe that is an appropriate image to keep in mind. After five years of generationally low rates, investors are ?stretching? for yield ? that is, they are scooping up deals at yields that, in our opinion, barely compensate them for the risk.
2014-04-22 00:00:00 Unloved Emerging Markets May Hold Value for Opportunistic Bond Investors by Kathleen Gaffney of Eaton Vance
· Emerging markets have come under pressure over the past year due to the Federal Reserve tapering its asset purchases and increased expectations of higher interest rates in the U.S. · We think investors should consider emerging markets to find opportunities that may provide a yield advantage and diversification away from U.S. interest-rate risk. · A multisector approach that uses bottom-up, fundamental credit analysis may be helpful in finding opportunities in emerging markets.
2014-03-25 00:00:00 Five Things You Should Know About Housing Reform Legislation by Michael Canter, Matthew Bass of AllianceBernstein
A recent US Senate bill calls for a restructuring of the government?s role in housing finance, including winding down Fannie Mae and Freddie Mac. Here are five takeaways from the current proposal.
2014-02-20 00:00:00 The Fed: Yellen's Tapering Tightrope by Milton Ezrati of Lord Abbett
In reducing quantitative easing, the Federal Reserve chairwoman faces a big challenge: preventing asset bubbles at home without pressuring developing economies.
2013-12-24 00:00:00 Fed Taper Brings Us Back to the Future by Kristina Hooper of Allianz Global Investors
A return to normal economic conditions is now more palpable following the Feds decision to start unwinding QE and early signs of a revival in consumer spending, growth and jobs, writes Kristina Hooper.
2013-12-23 00:00:00 Risk Assets Take Fed Taper Announcement in Stride by Roger Bayston of Franklin Templeton
The US Federal Reserve (Fed) delivered an early holiday surprise to some market participants, announcing at its December 18 policy meeting it would start slowing its asset purchase program known as quantitative easing in January. For some thoughts on what this may mean for the markets in the new year, we turned just after the announcement to Roger Bayston. He believes the markets should be able to take the Feds tapering in 2014 in stride, although investors should prepare for the proposition of higher Treasury yields.
2013-12-21 00:00:00 Start Me Up: Fed Announces a Much-Anticipated Taper by Liz Ann Sonders of Charles Schwab
The Fed decided to begin tapering its QE-related bond purchases with a reduction of $10 billion; split evenly between Treasuries and mortgage-backed securities. In a sign that tapering was already priced in, the stock market surged on the announcement; while bond yields remained quite tame. The Fed announced slightly sunnier economic forecasts, suggesting quantitative easing could wind down within a year.
2013-12-19 00:00:00 A Dovish-Bullish Taper by Brian Wesbury, Bob Stein of First Trust Advisors
They finally did it. At Chairman Bernankes next to last meeting, the Federal Reserve announced a modest tapering of quantitative easing, reducing its monthly purchases of Treasury securities and mortgage-backed securities by $5 billion each ($10 billion total) to $75 billion starting in January. As a result, the size of the Feds balance sheet will continue to rise, but slightly more slowly than before.
2013-12-19 00:00:00 Is Your Inflation Protection Really Protecting You? by Thomas Luster, Stewart Taylor, Kevin Dachille of Eaton Vance
Many investors who own Treasury Inflation-Protection Securities (TIPS) and TIPS mutual funds don’t realize that they may be taking a significant amount of interest-rate risk in exchange for their inflation protection, which may result in losses when rates begin to rise rapidly. Shorter-maturity TIPS carry the same inflation adjustment as longer-term TIPS, but have less sensitivity to interest rates, which may be helpful in times of rising interest rates like what investors experienced in spring 2013.
2013-12-17 00:00:00 Taper Time? by Scott Brown of Raymond James
There are many arguments for and against an initial reduction in the Feds monthly rate of asset purchases, but the balance has shifted toward a December taper. It appears to be a very close call, but even if the Fed decides to delay again, we all know (or should know) that QE3 is going to wind down in 2014.
2013-11-19 00:00:00 A Glimpse of a Yellen-Led Fed by Kristina Hooper of Allianz Global Investors
Kristina Hooper highlights some key takeaways from incoming Federal Reserve chair Janet Yellens testimony before the Senate last week, including when the Fed is likely to taper its bond-buying program.
2013-10-26 00:00:00 A Code Red World by John Mauldin of Millennium Wave Advisors
The heart of this week’s letter is the introduction of my just-released new book, Code Red. It is my own take (along with co-author Jonathan Tepper) on the problems that have grown out of an unrelenting assault on monetary norms by central banks around the world.
2013-10-08 00:00:00 Listen to the 10th Man by Kristina Hooper of Allianz Global Investors
Theres no shortage of short-term risks in todays market or conventional wisdom on how they will play out. But prepping for the unexpected could limit the number of surprises and better insulate investors portfolios, writes Kristina Hooper.
2013-10-04 00:00:00 The Fed and Its Big Thumb by Ron Muhlenkamp of Muhlenkamp & Co.
Weve seen what happens when prices get ahead of the economy reality. The bubbles in the dot-coms in 2000 and the housing market in 2007 were such effects. We fear that the apparent Fed desire to continue to manipulate interest rates may engender more bubbles.
2013-09-17 00:00:00 The Upside of Low Expectations by Kristina Hooper of Allianz Global Investors
The stock market has benefited from a pessimistic outlook recentlyand so could the consumer, writes Kristina Hooper.
2013-09-09 00:00:00 The Shape of Things to Come by Kristina Hooper of Allianz Global Investors
With a week to go before the September FOMC meeting, theres little that stands in the way of Fed tapering. Fridays jobs report didnt impress but it probably wasnt bad enough to stop central bankers from pulling some punch, writes Kristina Hooper.
2013-09-06 00:00:00 GSE Reform Lumbers Up to the Starting Gate by Michael Canter of AllianceBernstein
Momentum is finally building to do something with Fannie Mae and Freddie Mac. The bipartisan Corker-Warner proposal, now making the rounds on Capitol Hill, aims to dissolve the GSEs and start fresh. Meanwhile, Fannie and Freddie are testing innovative mortgage-security structures that transfer the risk of borrower defaults to the private sector.
2013-08-26 00:00:00 The Case for More Mortgage QE by Kristina Hooper of Allianz Global Investors
Disappointing new home sales dont mean that tapering is less likely to occur in September. Rather, it may only mean that when tapering begins, the Feds likely to start small and only trim Treasuries.
2013-08-12 00:00:00 Quantitative Easing: Is it Working? by Mark Ungewitter of Charter Trust Company
In September 2012, the FOMC announced a third round of quantitative easing intended to reduce long-term interest rates. Since then, the New York Fed has purchased about $700 billion of mortgage-backed securities. But a funny thing happened on the way to lower interest rates. During the QE3 period, the benchmark 10-year US Treasury yield has risen by a full percentage point. The targeted 30-year mortgage rate has also risen by about 100bps.
2013-06-27 00:00:00 AdvisorShares Weekly Market Review by Team of AdvisorShares
Once again, US stock indexes declined last week based on investors fears of rising interest rates. While markets were rising at the beginning of the week, on Wednesday, Federal Open Market Committee Chairman Ben Bernanke said that if the economy continued on its current growth path, the Fed would scale back on asset purchases by the end of the year and attempt to end the extraordinary measures by the middle of 2014.
2013-06-20 00:00:00 Fed Slightly More Optimistic by Brian Wesbury, Bob Stein of First Trust Advisors
The Federal Reserve made only slight changes to the text of its statement, but those it did make signal slightly more optimism. It said labor market conditions show further improvement, rather than some improvement and sees diminished downside risks for the broader economy.
2013-06-12 00:00:00 Silver Lining: Fed's Tapering Signals Stronger Economy by Eric Takaha of Franklin Templeton Investments
The Federal Reserves warning that it planned to scale back purchases of Treasuries sparked a storm on Wall Street, bringing instability to what had been a pleasant May in the US markets. Almost lost in the noise, however, is a silver lining: the Fed thinks the economy may be healthy enough to fly on its own.
2013-03-25 00:00:00 Fed Outlook: Cautiously Optimistic or Just Hopeful? by Scott Brown of Raymond James
The Federal Open Market Committees latest policy meeting generated few surprises. The FOMC maintained its forward guidance on the federal funds rate target, which is still not expected to start rising until 2015, and did not alter its asset purchases plans ($40 billion per month in agency mortgage-backed securities and $45 billion in longer-term Treasuries). However, in his press briefing, Bernanke indicated that the pace of asset purchases could be varied as progress is made toward the Feds goals or if the assessment of the benefits and potential costs of the program were to cha
2013-02-08 00:00:00 Messing with the Bull by Peter Schiff of Euro Pacific Capital
With the announcement this week of its massive $5 billion lawsuit against ratings agency Standard & Poor's, the Federal Government took a bold step to squelch any remaining independence of thought or action in the financial services industry. Given the circumstances and timing of the suit, can there be any doubt that S&P is paying the price for the August 2011 removal of its AAA rating on U.S. Treasury debt?
2013-02-06 00:00:00 What Happens When the Fed Loses Money by Zach Pandl of Columbia Management
The Federal Reserve's exit from ultra-easy monetary policy still looks very far offby most accounts, rate hikes will not begin for more than two years and asset sales for even longer. However, the exit strategy could matter for markets well before that point. Fed officials have said that they will consider the costs and risks associated with quantitative easing (QE) when deciding how long to continue their purchases, and one factor they will be looking at will be whether the program could "complicate the Committee's efforts to eventually withdraw monetary policy accommodation."
2013-02-05 00:00:00 2012 Equity Market Market Year in Review by Natalie Trunow of Calvert Investment Management
Equities started the year strong as global inflation remained tame, and aggressive, accommodative monetary policy by central banks around the globe helped equity markets rally hard off their lows posted in the fall of 2011. Continuously improving U.S. economic data, strong corporate earnings, and policy steps toward mitigation of the sovereign debt crisis in Europe also provided support for the equity markets worldwide.
2013-01-14 00:00:00 Bond Market Review & Outlook by Thomas Fahey of Loomis Sayles
The ?nal quarter of 2012 was the icing on the cake of an exceptional year for the credit sectors. Fourth quarter credit gains stemmed in part from uncommonly aggressive monetary policy responses in the third quarter. As economic growth continued to undershoot expectations, major central banks made clear that they were dissatis?ed with the status quo of tepid economic growth and high unemployment. The Federal Reserve went so far as to tie its monetary policy to the level of the unemployment rate.
2010-04-05 00:00:00 No Double-Dip For Housing by Brian S. Wesbury and Robert Stein of First Trust Advisors
While the end of the Federal Reserve's massive mortgage purchasing program will certainly not help the housing market, it probably will not result in a double dip for housing of the economy. Instead, home building, home sales and home prices should all be up nationwide a year from now versus today. Perhaps the most important reason for this is that the labor market, the last of the lagging economic indicators, has finally turned positive.