Best of the Bond Market for October 30th, 2012
Reuters: – Catastrophe bonds unlikely to take long term hit after Sandy. – Investors who have put their money into specialist financial bonds which cover insurance companies from huge natural disasters are unlikely to be hit with big losses from monster storm Sandy even though it is one of the biggest ever to hit the United States.
SIFMA: – US bond market will be open for business tomorrow. – The Securities Industry and Financial Markets Association (SIFMA) recommends the market be open on Wednesday, October 31, for the trading of U.S. dollar-denominated fixed-income securities in the United States.
Glen Rosenberg: – BBB Rated munis are as safe as AAA rated corporates - Few bond investors are aware that BBB rated municipal bonds have a superior success record to AAA rated corporate bonds when you compare the default rates of each asset class over the last 15 years, according to a recent Standard & Poor’s study.
Cate Long: – America has the resources to face Sandy. – Hurricane Sandy may cause as much as $20 billion in economic damage and losses as the biggest Atlantic storm floods homes, disrupts millions of fliers, and forces retailers to close stores. Who pays the cost for all this damage?
Bloomberg: – Bernanke’s cash fueling record corporate rally. – Federal Reserve Chairman Ben Bernanke is fueling a record-long winning streak in corporate debt as the money he pumps into the economy spurs investors to seek riskier assets to generate returns.
Reuters: – UBS to slash 10,000 jobs in fixed income retreat. – UBS unveiled plans on Tuesday to wind down its fixed income business and fire 10,000 bankers, as it adapts to tougher capital rules that make it more difficult for investment banks to turn a profit since the financial crisis.
Artemis: – Catastrophe bond market participants comment on Sandy. – We’ve been busily canvassing opinions and thoughts on hurricane Sandy’s potential impact from our contacts and friends in the marketplace today. Sandy is still threatening to be the worst northeast hurricane in memory, larger in size, with stronger winds and threatening a larger storm surge than last years hurricane Irene.
Morningstar: – One foot on the brake, one on the gas. – The average credit spread in the Morningstar Corporate Bond Index widened 3 basis points last week to +136. Markets softened as a steady stream of disappointing earnings and downward guidance from US companies badgered investor sentiment. However, stronger-than-expected economic metrics along with continued technical factors have largely helped to offset a significant widening in credit spreads.
Learn Bonds: – How to predict stock market selloffs using the bond market. – It is common knowledge among institutional investors, that while the average investor stays glued to the stock market, the “smart money” watches the bond market. The bond market is much larger than the stock market and where the big boys play.
ETFdb: – 3 High-Yielding long term bond ETFs. – Because long-term fixed income is sensitive to changes in interest rates hikes, the theory has been that the inevitable uptick in inflation will send prices tumbling. But so far, interest rates have shown no signs of climbing, and long-term bonds have produced stellar returns and continue to offer up some quality dividend yield opportunities.
Reuters: – US corporate bond new issues. – A list of upcoming high-yield and high-grade corporate bond offerings, compiled by Reuters.
Benzinga: – Investors pour cash into EM bond funds. – Bond ETFs are expected to drive asset growth for exchange-traded products in the coming years. By some estimates, bond ETFs could have $2 trillion in assets under management by 2020. This year, bond ETFs have accounted for nearly a third of all inflows to exchange-traded products.
Gross: #Italy has a lot of debt but a low deficit. Not a clean dirty shirt country but not caked with mud either. 4-5% yields.
— PIMCO (@PIMCO) October 30, 2012
Bonds and stock markets officially planning to open tomorrow. Normal would feel good.
— Deborah Levine (@dlevineMW) October 30, 2012
— Cate Long (@cate_long) October 30, 2012