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Republished from Dr. Ed Yardeni’s blog: “Dr. Ed’s Blog”
What’s the difference between a correction and a bear market? The conventional definition is that the former is a drop in stock prices that falls short of a 20% decline. Anything beyond that is a bear market. A correction tends to be caused by falling valuation multiples (P/Es), triggered by fears that earnings will drop. If earnings remain stable or continue to rise, contrary to expectations, ...

MarketWatch – May 30, 2012 – By Business Wire

ALEXANDRIA, Va., May 30, 2012 (BUSINESS WIRE) — The Municipal Securities Rulemaking Board (MSRB) today launched an online “toolkit” to equip investors with basic information about navigating the municipal market.

Individual investors own about two-thirds of the nearly $3.7 trillion in outstanding municipal securities, either directly or through mutual funds. A central focus of the MSRB’s mission is protecting these individual investors and ensuring that they have the information they need to understand ...

Republished from Dr. Ed Yardeni’s blog: “Dr. Ed’s Blog”
Over the past 36 months through February, net inflows into bond mutual funds totaled $1.0 trillion, while net inflows into equity funds were close to zero. Unfortunately for bond investors, the equity funds enjoyed capital gains of $2.7 trillion over this period, while the bond funds had gains of only $437 billion. Now that bond yields are starting to move higher, those gains are likely to ...

Republished from Dr. Ed Yardeni’s blog: “Dr. Ed’s Blog”
The backup in the 10-year US Treasury bond yield since late February certainly reflects mounting confidence in the strength and sustainability of economic growth. The nominal yield rose to 2.31% on Friday despite the Fed’s commitment to continue its Maturity Extension Program (MEP), a.k.a. “Operation Twist.” Since MEP was introduced on September 21, 2011, the bond yield has traded mostly below 2.0%. Perversely, yields might be ...

Republished from Reuters: “Bond Funds Find Yield in Europe’s Mine Field”

By Tim McLaughlin
BOSTON, March 7 | Wed Mar 7, 2012 1:34pm EST
(Reuters) – Don’t write off Europe’s chaotic bond market just yet – at least not all of it.

Some U.S. bond fund managers say investment-grade corporate debt from Italy and Spain is a “sweet spot” for picking up reliable yields at junk bond prices.

To be sure, it’s a contrarian investment play on a continent whose ...

Republished from Dr. Ed Yardeni’s blog: “Dr. Ed’s Blog”
The latest Commitments of Traders report compiled by the CFTC shows that large speculators and small traders were net long a record 101,926 contracts on February 14. Each contract is for 42,000 US gallons, or 1,000 barrels, of gasoline. During the week of February 10, gasoline inventories in the US stood at 232 million barrels. In other words, speculators and traders, in effect, held a record ...

Republished from: Investment News.


In the proposed 2013 budget released today, Obama reprised his call to cap deductions, including tax-exempt interest, for families earning more than $250,000 a year. He also wants to revive Build Americas, taxable bonds whose interest bills are paid in part by the federal government. Obama also proposed lifting restrictions that prevent states and cities from refinancing bonds.

The president’s proposals may face obstacles ...

Republished from: “Morningstar.com”
The corporate credit market continued its march higher last week. Credit spreads tightened another 7 basis points, as the average spread of Morningstar’s Corporate Bond Index declined to +211 basis points over Treasuries. Economic indicators released last week were generally positive and were capped off Friday with a much stronger-than-expected nonfarm payrolls report. The bulk of fourth-quarter earnings reports have generally been in line with expectations. A few exceptions aside, credit ...

Republished from: “Institutional Asset Management”
Asset classes promising better than average returns attracted strong inflows during the final week of January with flows into EPFR Global-tracked Emerging Market Equity Funds hitting a 43 week high, Municipal Bond Funds enjoying their best week in over five years and High Yield Bond Funds taking in another USD2.7 billion. Money Market Funds, whose seven day yield remains stuck around 0.02%, posted their biggest outflow since early August.

“Flows have ...

Fed’s low-interest-rate policy making tax-exempt debt very attractive, say portfolio managers; ‘renewed confidence’
By Jeff Benjamin
Republished from: Investment News
The Fed’s extended low-interest-rate policy will continue to be a bonus for muni bond investors, according to James Colby, portfolio manager and senior municipal strategist at Van Eck Global.

In an environment where municipal bond yields are already at historic highs relative to Treasury yields, Mr. Colby said the Federal Reserve’s most recent commitment to keeping Treasury yields ...