September 2014 Bond investors turned cautious last month, reversing the upward trend in price witnessed for much of this year. As the Federal Reserve meeting concluded on September 17th, investors were hungry for clues as to when the FOMC would move to raise interest rates. Instead, the Fed further confused matters with the announcement that […]
Below is a chart, we think you might find interesting. We plot the total number of employees counted in the non-farm payroll survey (left scale 000s) and the number of Job openings (right scale, 000s) as tracked by the BLS’ JOLTs survey. Key observations: Number of Job openings has surpassed last previous peak Number of […]
We put together a quick graph of short term interest rates and the market’s expectations of future rates. The current LIBOR curve as measured by the LIBOR Futures market predicts rates to rise to between 1.09% and 1.95% from December 2015 to September 2016 (Charted as the blue shaded line below). We then assumed that […]
The bond market staged a strong rally in the liquidity-starved month of August as professional traders and arbitrageurs squeezed shorts, pushing bond prices higher and the yield curve flatter. The rally came despite continued economic strength and was accomplished in conjunction with a rally in equity prices. Typically, bond and stock prices move in the […]
“The demand for bonds has been so great in recent years that people have looked beyond the credit rating as they just want yield – any type of yield,” says Michael Kastner of Halyard Asset Management. Corporate bond ratings do not discern risk
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CNBC’s Jeff Cox, and Michael Kastner, Halyard Asset Management, discuss why retail investors are steering clear of junk bonds while institutional money is buying. One investor’s junk (bond) another’s treasure http://video.cnbc.com/gallery/?video=3000303435
Michael Kastner, principal at Halyard Asset Management, says relationships with banks “are not nearly as close as they once were” given the shifting regulatory backdrop. This has spurred Mr Kastner to hold “liquid” fixed-income securities – or those that can more easily be sold. He says he is steering clear of certain bonds, such as […]
Continued improvement in the economy and the realization that interest rates may rise sooner than expected resulted in a mild upward drift in interest rates in July as trading volume slowed. The headline news during the month was that after nearly two years of wrangling and resistance, the Securities and Exchange Commission on July 23rd […]
Mr Kastner says Fed policy has driven investors into areas of the market and exuberance that typified the end of the last boom in 2007. But he worries that changes since then have exposed retail investors to greater excesses with credit derivative securities being packaged into exchange traded funds and how small investors are now […]