Salient to Investors: Texas bonds this year have outperformed other top-rated states. John Bonnell at USAA Investments said the nation’s second-biggest economy shields Texas from cutbacks and lures bond investors, with demand for almost everything in Texas. Robert Dye at Comerica said: The population of Texas, the second-most-populous state, is younger than the U.S. average
READ MORE... →Salient to Investors: Net buying of long-term U.S. equities, notes and bonds totaled $67 billion during July versus $9.3 billion in June. Guy LeBas at Janney Montgomery Scott says European investors bought Treasuries et al to protect against deterioration in the euro financial markets, and this will continue into August. China holdings of U.S. Treasuries in July rose $2.6
READ MORE... →Salient to Investors: The yield gap between the 10-yr and 30-yr Treasuries is at the highest in a year. Brian Edmonds at Cantor Fitzgerald said Treasuries are worried about inflation on the heels of open-ended stimulus. Sean Murphy at Societe Generale said the Fed leaving its purchases open-ended and extending its guidance means a steeper yield curve. QE3 is
READ MORE... →Salient to Investors: Ethan Harris at Bank of America said Bernanke will fight until he sees a real economic improvement, and expects the Fed to continue buying bonds until the unemployment rate declines to 7 percent, and start outright purchases of U.S. government debt in 2013. Neal Soss at Credit Suisse Group says history enables
READ MORE... →Salient to Investors: Build America Bonds are set to beat Treasuries and tax-exempt municipal debt for a third straight year – they offer an attractive yield to international buyers who don’t benefit from munis’ tax exemption. Justin Hoogendoorn at BMO Capital Markets said the bonds are hard to find. Concern that European leaders may
READ MORE... →Salient to Investors: Jeffrey Gundlach at DoubleLine Capital said: Equities won’t repeat the poor performance of 2000 to 2010, when the S&P 500 fell 14 percent. Equities are superior to fixed-income as an inflation hedge. Stocks’ unpopularity is positive. The S&P 500 isn’t cheap – the Chinese stock market is better value. Mutual-fund investors withdrew $313 billion from U.S.
READ MORE... →Salient to Investors: Junk-bonds are outperforming the highest speculative-grade tier by the most since February, and yield the lowest ever. EPFR reports inflows into junk-bond funds globally at $52.4 billion for 2012 through Aug. 29, versus $8.3 billion in 2011 and $31.5 billion in 2010, and despite slowing earnings growth for speculative-grade companies accelerating credit-ratings cuts.
READ MORE... →Salient to Investors: Companies in the euro-region periphery are issuing bonds at the fastest pace since March 2011, tapping record-low yields on optimism from Germany’s ratification of the euro-area bailout fund and by bond-buying programs from the ECB and the Fed. European corporate bond yields are 2.54 percent, down from 4.4 percent at the
READ MORE... →Salient to Investors: Dan Mulholland at BNY Mellon sees Fed policies as inflationary, resulting in the long end of the curve losing sponsorship. The yield gap between 10-year notes and TIPS – called the 10-year break-even rate – increased to as high as 2.54 percent, the highest since May 2011 and versus an average of 2.16 percentage
READ MORE... →Salient to Investors: Sivan Mahadevan et al at Morgan Stanley said longer-dated bonds pose the biggest risk in the U.S. corporate bond market. Read the full article at http://www.bloomberg.com/news/2012-09-07/investment-grade-long-bonds-pose-most-risk-morgan-stanley-says.html
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