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 […]
Michael Kastner, principal at Halyard Asset Management, says the increased regulatory oversight on US global banks means a catalyst to drive their share price higher is no longer present. He says investors are trying to work out whether “the Fed wants these banks to be innovative and create new products that can drive earnings or […]
June 2014 Bond market performance in June was lackluster as rates were essentially unchanged for the month. For those espousing the fragility of the economic recovery and supportive of continued emergency monetary policy, the June employment report must have been a shocker. That constituency is dwindling given the continued robustness of job growth. As was […]
As our clients are aware, the basis of our investment thesis is that interest rates have been artificially depressed by the Federal Reserve’s bond buying program and that as the operation concludes, interest rates will normalize at higher levels. That thesis has been challenged this year, and especially so in last month. Ironically, May was […]