Michael Kastner, principal at Halyard Asset Management says there is a risk that bond yields rise further as economic growth for the second quarter and the July jobs number is revised upwards. “It looks like the economy has underlying strength and as an investor you have to respect the bond selling we saw in May […]
Michael Kastner, managing principal at Halyard Asset Management, says he is hedging the duration risk in his portfolios from owning longer-dated corporate bonds with interest rate futures. “We are adding exposure across all sectors and see investment grade clawing back some ground on junk,” he says. Investors bet on junk bonds to outperform
Municipal Bonds – Value in a Risky Interest Rate Environment! • Municipal Bonds Attractive Relative to US Treasury Notes – Again • Increase in yield to maturity a welcome development….But the rate is still low! • Targeting AA rated paper as investors sold good bonds into a bad market • Implementing interest rate hedges to […]
As detailed in the last monthly update, we believe the normalization of interest rates has begun, as the vicious bear market witnessed in May continued into June. During the month, the 10-year note reached a high yield of 2.61% before closing the month at a yield-to-maturity of 2.49%. That’s nearly one hundred basis points higher […]
Did fixed income ETF’s sing their swan song yesterday? Maybe not, but after the abysmal performance yesterday, investors must reevaluate the risk and liquidity of an ETF before assuming the product is a cost-effective proxy for a diversified fixed income portfolio. In the midst of the fixed income rout, ETF sponsors found themselves unable to […]
The normalization of interest rates has begun. We’ve warned for some time that Fed-engineered interest rate manipulation would result in investor losses once the central bank ended the practice. May was the beginning of that trend. Comments made by several members of the Federal Open Market Committee suggesting that the Fed was contemplating “tapering” the […]
“No one wants to own Tips and the lack of Fed talk as yields have risen suggests they are letting the market feel its way,” said Michael Kastner, managing principal at Halyard Asset Management. QE worries drive Treasury rates up
“We are definitely worried that the market is in a cycle where selling of bonds begets more selling,” said Steven Boyd, principal at Halyard Asset Management. The hefty outflows illustrate the anxiety of investors ahead of the May employment report due on Friday. The Federal Reserve has indicated that its suppression of interest rates under […]
“No one likes to see equities close at their low on a Friday as it sets the market up for an ugly open the following week,” said Michael Kastner, managing principal at Halyard Asset Management, adding that short sellers in the Treasury market were closing positions later in the day. Markets whipsaw on Fed uncertainty
“Volatility is here for a while and will rise further,” said Michael Kastner, principal at Halyard Asset Management. “It’s clear that Bernanke wants to prepare markets for less stimulus. Stocks look expensive and a correction would be healthy.” Market bulls run into the sand