Salient to Investors: Bank of America Merrill Lynch’s MOVE index, which measures price swings based on options, fell to 55.6, the least since June 5, 2007. The yield gap between yields on 10-yr notes and 10-yr TIPS fell to 2.35 percent, the lowest in almost 10 weeks and versus the average 2.18 percent over the
READ MORE... →Salient to Investors: BlackRock’s junk bond ETF reported an outflow of 2.4 million shares yesterday, the biggest daily withdrawal in its five-year history. The five largest junk-bond ETFs have lost $1.97 billion of assets since Sept. 20 as investors sour on a four-year rally in junk debt. Read the full article at
READ MORE... →Salient to Investors: Fed Vice Chairman Janet Yellen backed a proposal to link the Fed’s zero interest-rate policy to progress toward meeting its goals for inflation and employment rather than to a calendar date. Read the full article at http://www.bloomberg.com/news/2012-11-13/yellen-says-fed-should-tie-rate-outlook-to-economic-goals-1-.html
READ MORE... →Salient to Investors: JPMorgan Chase said the drop in the yield on 10-yr Treasuries below 1.7 percent indicates investors expect GDP to fall 0.3 percent next year as the fiscal cliff takes effect. Terry Belton at JPMorgan Chase continues to believe that Congress avoids the fiscal cliff. Priya Misra at Bank of America Merrill Lynch
READ MORE... →Salient to Investors: Money managers said fears that the US economy will slow as Obama and Congress fail to avert the fiscal cliff are overblown. Volatility across markets has declined, signaling investors are less worried about the economic outlook. Bettina Mueller at Deutsche Bank is astonished the market is turning so quickly, and expects
READ MORE... →Salient to Investors: Alice Rivlin at Brookings said the lesson of Europe is, don’t wait until you’re in a crisis to act and austerity is not a good prescription for weak economies. Rivlin said the US has the luxury the Europeans don’t, no pressure in the financial markets. Mohamed El-Erian at Pimco said the fiscal cliff would
READ MORE... →Salient to Investors: Bill Gross at Pimco increased holdings of Treasuries for the first time since April – to 24 percent of Total Return Fund assets last month from 20 percent in September – mortgages were reduced to 47 percent from 49 percent in September. Net cash-and-equivalent assets fell to negative 9 percent in October from negative
READ MORE... →Salient to Investors: Fidelity Investments and Pimco said the fiscal cliff and Fed bond purchases will drive demand for debt. Roger Bridges at Tyndall Investment Mgmt we’re back into political games – if we continue this policy uncertainty, then the economy will fall and bonds will rally. Bill Irving at Fidelity said people own government
READ MORE... →Salient to Investors: Mohamed El-Erian at Pimco said: Municipal debt is more attractive after the re-election of Obama. Investors should be careful of the long-end of the yield curve. TIPs are attractive. Bernanke is likely relieved as he knows he has more scope to continue with his unusual activism. The Fed will continue
READ MORE... →Salient to Investors: Wilshire Associates said US public pensions ended Q3 with a median gain of 4.67 percent as bond managers bought riskier debt and fixed-income securities with longer maturities. The median public pension was 55.5 percent in stocks, 25.7 percent in bonds, almost 3.7 percent in real estate, and 1.9 percent
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