Bonds 06 (Oct 23 - Dec 26)

[winston]

The Easy Part of the 'Treasury Rally' Is Over

by Peter Tchir

The "easy" part of the Treasury rally is over. We could bounce around but I am looking for more weakness on the data side to push us below 4.3% on the Ten-year.

After the recent rally, we might drift higher in yields first and see some shorts get put on, but I think that we'll see 4.3%, before 4.75%.

The Treasury market moves will be mainly expressed five years and out as the Fed will be in no rush to cut rates. This implies that a bet on more negative curves is the direction to lean toward.

I continue to like credit here. Supply should slow into year end and I think many large institutional investors will overweight corporate bonds relative to treasuries because D.C. makes them more nervous than recession risks.

Stocks will likely follow earnings, yields, and may try to rally some more as we're about to be bombarded with "seasonal" effects (or at least the reporting will focus on seasonal effects).

I like stocks until we get to 4.3% on the 10-year, and then would be extremely nervous as we won't get there without greater recession concerns.

Source: The Street

https://realmoney.thestreet.com/stocks/ ... r-16137325

[behappyalways]

US 30y yield spiked higher after a sale of $24 billion in bonds received far less demand from investors than the govt is used to.
https://twitter.com/Schuldensuehner/sta ... 4319222226

[winston]

The 'Mother Of ETFs' Is Bullish On Bond ETFs

by PAUL R. LA MONICA

Joanna Gallegos is the co-founder and chief operating officer of BondBloxx, a firm that specializes in Treasury and high-yield bond ETFs.

We look at how the resilience of the consumer and corporate balance sheets are not showing softness in the economy yet.

We look at how the resilience of the consumer and corporate balance sheets are not showing softness in the economy yet.

We don't see a recession at the end of this year or even into 2024. We don't see distress or big credit-default events coming that quickly.

Source: IBD

https://www.investors.com/etfs-and-fund ... src=A00220

[behappyalways]

Japanese investors are selling US corporate debt at a record pace
https://twitter.com/Mayhem4Markets/stat ... 2041385245

[winston]

Bond Yields Are High and Prices Are Falling: What Does It Mean for Your Portfolio?

by Eric Reed

First, the yield on newly-issued bonds has remained surprisingly strong.

Second, this has pushed down the value of older bonds. The more new bonds pay, the less investors pay to buy previously-issued assets.

Third, and finally, analysts expect this to remain the state of play for the foreseeable future.

Source: Smart Assets

https://finance.yahoo.com/news/bond-yie ... 00160.html

[winston]

Bonds’ Best Month Since March Faces ‘Sanity Check’ in Auction

by Elizabeth Stanton

The 30-year bond auction on Nov. 9 nonetheless drew a much higher-than-expected yield, a sign of weak demand that fueled a major selloff in the market that day.

Treasuries are poised for double-digit returns in 2024, given the Bloomberg Economics view of the year starting in a recession, followed by a tepid recovery.

Treasury demand could overwhelm supply with expectations of easier monetary policy and declining inflation, while federal deficits will continue to be a concern.

Source: Bloomberg

https://finance.yahoo.com/news/bonds-be ... 00683.html

[winston]

The Contrarian Trade for 2024 (7.9%+ Yields)

by Tony Daltorio

BondBloxx USD High Yield Bond Telecom, Media & Technology Sector ETF (XHYT): 10.36%.

BondBloxx USD High Yield Bond Financial & REIT Sector ETF (XHYF): 8.96%.

BondBloxx USD High Yield Bond Consumer Non-Cyclicals Sector ETF (XHYD): 7.91%.

BondBloxx USD High Yield Bond Consumer Cyclicals Sector ETF (XHYC): 8.52%.

BondBloxx USD High Yield Bond Healthcare Sector ETF (XHYH): 9.71%.

BondBloxx USD High Yield Bond Industrial Sector ETF (XHYI): 8.62%.

BondBloxx USD High Yield Bond Energy Sector ETF (XHYE): 8.01%.

The only two ETFs I do not like are the highest risk sectors. The first is technology (XHYT), because of all the massive changes, like AI, ongoing.

The second is healthcare (XHYH), because healthcare companies have already been hit by lower reimbursement rates and rising staff costs.

My personal preference is for the energy sector ETF (XHYE), followed by the industrial sector ETF (XHYI).

Source: Investors Alley

https://dailytradealert.com/2023/11/21/ ... -9-yields/

[winston]

My Favorite Bond Fund for 2024 Yields 7.4%

by Brett Owens

iShares JP Morgan USD Emerging Markets Bond ETF (EMB).

With the greenback topping out, EMB will grind higher. Which means price gains on top of a 7.4% payout, paid monthly.

Source: Contrarian Outlook

https://dailytradealert.com/2023/11/30/ ... ields-7-4/

[winston]

Bonds Just Had Their Best Rally Since the 1980s. The Music’s About to Stop.

By Randall W. Forsyth

The Treasury announced smaller-than-expected sales of longer-term securities.

Key inflation measures came in a hair under economists’ forecasts, raising the prospect that the Federal Reserve could begin to lower its key policy interest rates sooner, and by more, than previous market expectations.

Yield spreads for both investment-grade and high-yield corporate debt securities also have shrunk, so that these sectors are “priced for perfection.

Source: Barron's

https://www.barrons.com/articles/bonds- ... e_20231202

[winston]

Analysis - After blistering rally, some investors say Treasuries have bounced too quickly

by David Randall

Investors are pricing in 126 basis points in rate cuts for next year.

Some investors believe Treasuries have rallied too quickly and expectations for Fed cuts may be premature.

One reason: the Fed’s determination not to ease monetary policy too soon and invite a 1970s-style inflationary rebound.

Some also worry the rallies in stocks and bonds may have loosened financial conditions, making it easier for inflation to heat back up.

The recent bond rally, has gone “too far, too fast”.

The market has misread the Fed - and been wrongfooted on Treasury yields - several times in the last few years.

"The move has been very swift so we wouldn't be surprised to see some consolidation but ultimately we see bond yields moving lower into next year".

Source: Reuters

https://finance.yahoo.com/news/analysis ... 29616.html