Bonds 04 (Jul 15 - Aug 17)

[winston]

Sell Emerging Markets Bonds Now: Morgan Stanley

By Shuli Ren

Warning of “the great bear rally unwind”, Morgan Stanley turned negative towards emerging markets again.

Specifically, the bank’s global cross-asset strategy team cut both local and hard currency sovereign debt to Underweight from Neutral, while remaining Underweight on emerging markets currencies.

Why the turn of sentiments now?

Emerging markets tailwinds have turned into headwinds. The pillars that supported the emerging markets rally earlier in the spring – a weaker U.S. dollar, commodity prices rebounding, and China’s macroeconomic data looking better – all start to crumble.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... n-stanley/

[winston]

A 'tsunami' is about to overwhelm the debt market

By Bob Bryan

The elevated rates of default in the commodity sector and high risk bonds are a harbinger of things to come for the broader debt market.

Decreasing profits: Mish notes that corporate profits fell 7.6% in the first quarter against the same period a year ago.

Lending standards are getting tighter. Lending conditions for new debt are getting tighter as banks focus on higher quality borrowers.

Debt is getting more expensive: Loan spreads, or the difference between what banks have to pay to borrow money and what they charge companies in interest on loans they then give out, are starting to widen.

"Higher frequency data suggest default stress is rising specifically in the media/entertainment, consumer/service, retail and aerospace/industrial sectors (as well as the non-bank financials)"

Source: Business Insider

http://finance.yahoo.com/news/tsunami-o ... 41942.html

[winston]

World’s Safest Market Beset by Most Volatility Since 2008

by Liz McCormick

Swings in Treasury bills widen amid debate over Fed path
Looming change in money-market rules adds to fluctuations

Source: Bloomberg

http://www.bloomberg.com/news/articles/ ... 008-crisis

[behappyalways]

Bond markets hit by economic worries
http://www.bbc.com/news/business-36498658

[winston]

There's a 'black hole' in the market

By Bob Bryan

By rates being this low, investors are expressing serious concerns over the financial stability of global economies.

The recent flattening of the bond curve looks worrying, since it seems to foreshadow a further slowdown in activity over coming months.

The inversion of the yield curve, or the yield of 10-year bonds falling below that of two-year bonds, has been noted as one of the most reliable predictors of a US recession.

So as this gets closer to happening, recession fears may bubble up.

Source: Business Insider

http://finance.yahoo.com/news/theres-bl ... 00947.html

[winston]

This Could Be The Best Investment to Meet Your Long-Term Income Needs

By Steve Mauzy

You could buy shares of SPDR Barclays Capital High Yield Bond ETF (NYSEArca: JNK) and receive a 6.4% yield

Source: Wyatt Investment Research

http://dailytradealert.com/2016/06/17/t ... ome-needs/

[winston]

Warning: Most Fixed-Income Investors Could Have This Ticking Time Bomb in Their Portfolio

By Alexander Green

Look at your total bond allocation. Make sure you have not overweighted fixed-income investments. Avoid long-term maturities. Pare back on medium-term maturities.

And sell ALL your leveraged closed-end bond funds. Yes, those safe-sounding ones that sport high yields. They are using leverage – margining the portfolio – and will take the biggest beating when rates rise again.

Wayne Gretzky famously said that he never skated to where the puck was. He skated to where it was going to be.

As an investor, you need to do the same. Reduce your bond market exposure now.

One day – and it may be sooner than you expect – you’ll be glad you did.

Source: Investment U

http://dailytradealert.com/2016/06/18/w ... portfolio/

[winston]

Bonds (10 year): 1.61% versus 1.57%.

After a big surge through Thursday, TLT gapped lower off a tombstone doji.

After 3 weeks of surging, just a bit overdone.

Source: Investment House

[winston]

Long-Term Bonds Are a Huge Value Trap

By Martin Hutchinson

Source: Wall Street Daily

http://www.thetradingreport.com/2016/06 ... alue-trap/

[winston]

Bonds (10 year): 1.57% versus 1.74%.

Able to leap week of selling in a single bound.

TLT gapped off the 50 day EMA test found over five sessions, closing just below the recent higher highs.

Source: Investment House