Municipal Bonds – Picking up Nickels in Front of a Train! • Municipal Bonds Attractive Relative to US Treasury Notes • Yield to maturity at Multi-decade Lows • Credit spreads continue rallying on moderate economic growth • Recommend reducing interest rate risk and maintaining single A average portfolio In 2012, longer maturity Municipal bonds preformed […]
“We spend a lot of time worrying about the bond unwind,” says Michael Kastner, managing principal at Halyard Asset Management. “A lot of money has piled into the sector and will go in the opposite direction at some stage, they are clearly in bubble territory. Everyone in bonds has the same idea that they can […]
Michael Kastner, partner at Halyard Asset Management, says the real shock for ordinary investors will not register until they see their tax bills. “Initially, professional investors will sell dividend payers and after some calm people will see how much tax they need to pay and we will then see another round of selling.” US investors […]
During October, the bond market came under pressure as investors grappled with better than expected economic data and a revival of inflation concerns. However, on-going quantitative easing provided support to the market in the final days of the month. Friday October 19th, marked the 25th anniversary of Black Monday, the day in 1987 that the […]
With economic activity continuing to grow at a low single-digit pace, the Presidential race still too close to call, and the “fiscal cliff” looming, fixed income investor demand for safety continued in September. The flight to safety is most evident in the demand for 3-month U.S. Treasury Bills, which closed the month with a yield-to-maturity […]
The heightened volatility in the fixed income market that first developed in mid-July continued into August, as investor continued to grapple with mixed economic signals and nervousness out of the Federal Reserve. The 30-year Treasury bond began the month with a yield-to-maturity of 2.54%, which rose to 2.95% mid-month before falling back to 2.67% at […]
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Against a mixed economic backdrop, confusing signals from Federal Reserve Chairman Bernanke, and ongoing brinksmanship in Europe, the 10-year Treasury note briefly touched an all-time low yield of 1.39% in July, before ending the month at 1.47%. Similarly the yield spread between the 2-year and 30-year Treasury notes narrowed to 223 basis points, more that […]
June was a month of relative reprieve from the ongoing European fiscal drama. Favorable outcome in the Greek election combined with the agreement among Eurozone members to move toward an FDIC-like bank support model went a long way to soothing the nervousness that griped the capital markets at the beginning of June. Of note during […]
Risk aversion returned to the capital markets last month, as investors struggled to understand the fate of European monetary union. The fear was most evident in the exodus of Euro-denominated assets out of European banks and into the U.S. dollar. Spanish banks bore the brunt of the capital outflow, with an estimated 100 billion Euros […]