The US government sold $25 billion of 30-year bonds at a lower-than-anticipated yield, soothing investor nerves about demand for longer-dated debt.
The US government sold a record $42 billion of 10-year notes Wednesday at a lower-than-anticipated yield, soothing investor nerves after a recent rout and indicating confidence that the Federal Reserve will eventually cut interest rates.
Janus Henderson Investors Portfolio Managers Greg Wilensky and Jeremiah Buckley discuss what they consider the three essential elements of an effective balanced strategy in the current environment.
Bond investors, still reeling from Treasuries’ worst two days in more than a year, are preparing for a new test on Wednesday when the government holds its biggest-ever sale of 10-year debt.
The can has been kicked down the road several times but it feels like the end of the road is in sight.
Investor worries about market concentration aren’t going away, and it’s easy to understand why: the so-called Magnificent Seven mega-cap growth stocks now constitute about 29% of the S&P 500 Index by market weighting, eliciting ominous comparisons to the peak of the dot-com bubble.
As I observed last month, the strongest stock market returns in the coming decade, perhaps longer, are likely to emerge during advances in the S&P 500 that attempt to catch up with the cumulative return of risk-free Treasury bills.
While focus remains on when the Fed will start cutting rates, history suggests other factors must be looked at when assessing forward stock market performance.
Treasuries are headed for their biggest two-day loss in months as strong economic data reinforced the message of Federal Reserve officials including Chair Jerome Powell that interest-rate cuts are unlikely to begin before May.
Emerging-market (EM) assets were resilient in 2023, gaining ground despite conflict in the Middle East, concerns over slowing economic growth in China, and the US dollar’s strength against other regional currencies. Now, with the Fed signaling rate cuts in 2024, the news could get better.
The US economy is testing bond traders’ faith that the Federal Reserve will deliver a series of interest-rate cuts this year.
A period of market volatility and consolidation is likely as markets have already priced in much of the economy's good news.
The start of 2024 has been marked by record issuance in bonds both in the public and private sectors. But as fresh supply hits the bond market, prices have been dipping as of late.
The Monetary Policy Committee (MPC) vote in favor of keeping the Bank of England (BoE) policy rate at 5.25%.
The rush into technology stocks is resembling the bubble of 1999, reflecting an assumption that the economy will perform strongly despite tighter monetary policy, according to Bank of America Corp. strategists.
When it comes to financial markets, nothing is certain. For much of the last few decades, however, it was easy to convince yourself otherwise: Interest rates mostly went in one direction, down, and high inflation was a thing of the past.
Treasury yields tumbled Thursday as a second day of declines for US financial stocks led traders to price in a more rapid pace of Federal Reserve interest-rate cuts.
As expected, the Fed held rates steady in January, but importantly downplayed the likelihood that rate cuts will start as soon as March.
Over the next few pages, I will argue that consumer price inflation (CPI), which is now falling rapidly across the OECD, will soon return to levels that central bankers are comfortable with.
Jerome Powell delivered a clear message to traders eager for the central bank to start slashing interest rates: Not so fast.
For many investors, fixed income investments have a primary objective of preserving wealth. The known characteristics of owning individual bonds are a major reason for this: known income, known cash flow, known redemption date, known redemption value.
As the calendar closed on 2023, investors were once again treated to magnificent returns in their stock and bond portfolio.
Income investors have an overwhelming number of investment options today. The menu ranges from traditional fixed income to equity investments like REITs to innovative covered call ETFs to more exotic vehicles.
History shows that monetary policy drives investment performance. When the Federal Reserve (Fed) hikes or cuts the fed funds target rate in response to economic conditions—or stays on hold while it assesses the data—performance will differ by sector.
The US Treasury boosted the size of its quarterly issuance of longer-term debt for a third straight time and suggested that no more increases are likely until next year.
Trading in bonds these days means having to put up with more frequent market gyrations — and that’s just fine with big investors like Pimco and BlackRock Inc.
Prior to 2022, many retail investors likely eschewed buying individual Treasury bonds from the U.S. government. That’s because they didn’t offer much in the way of income.
Investors’ lingering fears of recession have prompted Wall Street banks to hawk a complex hedge: exotic options that pay off if stocks fall and bond yields also drop.
The stock market’s rally to record highs heading into this week’s Federal Reserve meeting has some of Wall Street’s biggest optimists growing concerned that the good vibes are sending a contrarian signal.
Wall Street is widely expecting the US Treasury to announce a final increase to its sales of long-term debt this week, after a steady ramp up in supply that’s sometimes tested buyers’ appetites for funding a widening budget deficit.
Conventional thinking holds that higher interest rates mean lower home prices – or the corollary, lower rates mean higher prices. This naïve formulation, DoubleLine Portfolio Manager Ken Shinoda argues, overlooks the interplay of home prices and mortgage costs with housing supply and demand dynamics.
A traditional 60/40 stock/bond portfolio has been a tried and tested strategy among financial planners. But income seekers can specifically reap the benefits of both assets with exposure to one active exchange-traded fund: the NEOS Enhanced Income Aggregate Bond ETF (BNDI).
Value investing is the lens through which many view financial markets. Yet, a simple value factor has performed poorly for the last 16 years. Is the value effect over, or will it come back in 2024?
Jeff and Ron Muhlenkamp provide a recap of 2023 and look at the state of the economy at the start of 2024. They also explain their reason behind why they have significant portfolio holdings in certain industries.
Bond traders looking for something to jolt the $27 trillion Treasury market out of its recent rut will probably still be left waiting for answers, even after a busy week packed with a Federal Reserve meeting, the government’s quarterly debt-sale plans and a slew of economic data.
One of last year’s best wagers in emerging-market debt is getting a fresh boost from bets the Federal Reserve will finally begin cutting interest rates.
Interest rates in most parts of the world appear to be stabilizing, as inflation trends continue to decline from the high levels seen in the summer of 2022. Learn more about the implications for hedge fund strategies from K2 Advisors.
Many investors buy individual bonds as a means to preserve their wealth. They can serve as a method to balance growth assets (such as stocks).
The Federal Reserve’s preferred gauge of underlying inflation rose at the slowest annual pace in nearly three years while consumers spent at a robust rate, keeping the debate alive as to whether officials will soon cut borrowing costs.
Investors who wait too long to get off the sidelines may find they’ve missed out.
Credit quality in the muni market likely has peaked, but we believe states' strong rainy-day funds and other attributes will lend stability in the near term.
When the Treasury Department previews its note and bond auction sizes for the next three months on Jan. 31, some of the projected sizes are likely to be the biggest investors have ever seen.
Amid expectations that the worst case scenario for interest rates this year is that the Federal Reserve will halt its tightening cycle, some fixed income investors may be inclined to take their eyes of floating rate notes (FRNs).
The anticipation of rate cuts to come this year is making for a busy bond month to start 2024. Now, regional banks are adding to corporate bond sales, according to data from Bank of America.
When markets are volatile, it's tempting to move into cash. But those high yields on short-term cash instruments aren't as attractive once taxes and inflation are factored in.
The US 30-year yield climbed to its highest level so far this year Wednesday after poor demand for an auction of five-year notes, a week before the Treasury is expected to announce a heavier borrowing schedule for the February-to-April period.
Nomura Asset Management’s Richard Hodges began the year by buying credit default swaps, worried that rate-cut bets were becoming too aggressive. He reduced the hedge when the cost of protection increased, and now stands ready to dip in again.
Implications for credit investors.
There will be a lot of firsts for the economic history books if this business cycle can survive a labor market slowdown, 525 basis points (bps) of rate hikes and an extremely inverted U.S. Treasury yield curve.
The Federal Reserve is expected to make interest rate cuts this year. But representatives from the U.S. central bank are sending the message that the cuts won’t be coming soon.
