|Bid||83.2600 x 45100|
|Ask||83.2700 x 4000|
|Day's Range||83.2333 - 83.2900|
|52 Week Range||83.0400 - 84.7200|
|PE Ratio (TTM)||95.93|
|Expense Ratio (net)||0.15%|
While fund managers are bullish on US equities (SPY), there’s still no lack of concern in the market. In the BAML (Bank of America Merrill Lynch) August 2018 survey, for the fourth month in the last six, trade war concerns were cited as the top concern among global fund managers. A total of 57% of the fund managers surveyed cited trade war risk as what they considered to be the top tail risk.
Last week, President Donald Trump approved doubling of metal tariffs that led to the fall of lira by 20% on Aug 10. The United States plans to double import tariffs on Turkish steel to 50% and raise the rate on aluminum to 20%, Trump said on Twitter on Friday.The depreciation started after the Turkish delegation returned from Washington with no progress on the detention of Andrew Brunson, an American pastor detained in Turkey in 2016.The U.S. government debt prices spiked on Aug 10 as traders were in search of a safe haven. In response to U.S. ...
In times of market trouble, investors look for ways to limit their exposure while not foregoing returns entirely. While one could choose plain cash, the real rate of cash is negative; with inflation chipping away at value, a cash holding actually declines in value over time.
Howard Marks said at the 2018 Delivering Alpha Conference on July 23 that the Fed’s hawkish stance is the single biggest risk for the equity market (SPY). After maintaining ultra-low interest rates (TLT)(SHY) for a decade, the Fed has been continuing its gradual rate hike process since December 2015. It already hiked its key interest rate for the seventh time between December 2015 and June 2018, each time by 25 basis points.
David Rubenstein, the co-founder and co-executive chair of the Carlyle Group, said at the Delivering Alpha Conference that further interest rate hikes likely won’t damage the US economy (SPY). Many market participants believe we could see two more interest rate (SHY) hikes in the rest of 2018. In June 2018, the Federal Reserve hiked its key interest rate by 25 basis points, the second rise in 2018, and it brought the key interest rate (TLT) within the range of 1.75% to 2.00%.
While fund managers are bullish on US equities (SPY), there is still no lack of concern. In the BAML (Bank of America Merrill Lynch) July 2018 survey, for the third month in the last five months, trade war concerns were cited as the top concern of global fund managers. A total of 60% of the fund managers surveyed cited the trade war risk as the top tail risk.
A yield curve tracks the yields of Treasury securities maturing at different time periods. The narrowing of the difference between these yields is usually referred to as the “flattening of the yield curve.” The more concerning thing is when the yield curve (BND) inverts, which means that the yields on shorter duration securities increase those on the longer-term securities. The inversion of the yield curve has been a good indicator of an upcoming recession in the past.
An inverted yield curve, in which short-term yields (SHY) are higher than long-term yields (TLT), is considered as a warning sign for a future recession. The LEI’s economic model uses the yield spread between the ten-year Treasury bond (IEF) and the federal funds rate (TBF) as one of the components. The May LEI report indicated that this yield spread increased from ~1.2 in April to ~1.3 in May. The use of the term “symmetric” along with the inflation target in the May FOMC meeting minutes led to the increase of yield spreads in May.
The US bond market continued to rebound as trade tensions and the limited appreciation in equity markets pushed demand for bonds higher, depressing the bond yields for a second consecutive week. Bond investors seem to be questioning the US Fed’s enthusiasm for higher rates as bond yields continued to retreat. There weren’t any major market-moving economic data releases last week, which could have led to the fall in bond yields.
Famed investor Jim Rogers is again getting involved in the exchange traded products space, lending his name to a new global macro exchange traded fund of ETFs. The new ETF is “based on macroeconomic factors by leveraging the capabilities of AI and the multidecade expertise of Jim Rogers to find, track and project leading economic indicators,” according to a statement. Rooted in artificial intelligence capabilities, BIKR is an actively managed ETF.
The US bond market had a limited reaction to the Fed’s 25-basis-point rate hike and the 0.20% increase in interest paid on excess reserves. The spread between the US two-year and ten-year bonds narrowed to 36 basis points, which led to a further flattening of the yield curve in the previous week. The Vanguard Total Bond Market ETF (BND), which tracks the performance of the bond markets, rose 0.06% for the week ended June 15 and closed at 78.92.
The US bond market seems to be benefiting from multiple crises around the world. First, there was the crisis in emerging markets, which could further escalate if the US dollar continues to appreciate, and then there are uncertainties about Italian debt, the G7 meeting, and the upcoming central bank meetings this week. The Vanguard Total Bond Market (BND) ETF, which tracks the performance of the bond markets, was down by 0.28% for the week ending June 8 and closed at 78.9.
The US bond market was volatile in May. The ten-year yield reached a peak of 3.1% and fell to a low of 2.8% in a span of three weeks. The wild swings in the bond markets were a result of multiple factors including the dovish FOMC statement, weaker-than-expected inflation report, and a rebound in trade and geopolitical tensions. Last week, bond markets’ limited reaction to the stellar jobs report was a surprise. Although a strong jobs report increases the odds of a rate hike, the developments surrounding trade wars and domestic political uncertainties kept bond yields under pressure.
Fixed-income investors can also target the lower end of the yield curve through focused exchange traded fund plays as well. According to the latest Commodity Futures Trading Commission data, short-term traders turned to a bullish wager on two-year notes in the week ended May 22, Bloomberg reports. The shift in strategy came days after yields on the maturity, the most vulnerable benchmark note when it comes to expectations for Federal Reserve policy, hit its the highest in a decade.
The US bond market had some relief from its ongoing slide as the Fed’s May meeting minutes were less hawkish than expected. The Fed also wants to adjust the rate paid on excess reserves by 20 basis points on June 13, keeping the federal funds spread at 0.25%. Last week (ended May 25), the ten-year (IEF) yield closed at 2.9%, depreciating by 13 basis points.
The US bond markets remained under selling pressure as bond yields, especially at the short end of the curve, continued to shoot up, while the long-term yields remained subdued. The US Fed through its May post-meeting statement said that inflation would reach the 2% target soon, which was interpreted as a signal for a faster pace of rate hikes. An inverted yield curve, where short-term (SHY) yields are higher than long-term yields (TLT) is considered a warning sign for future recessions, and thus the yield spread has a place in the leading economic index.
The Conference Board uses credit conditions in the economy as one of the components of the leading economic index (or LEI) economic model. Changes to six financial market instruments are modeled to construct this credit index. ...
US ten-year bond market yields have scaled a new seven-year peak at 3.07, their highest level since July 2011. This 100-basis-point move, which happened over the span of a little over eight months, has taken its toll on bond prices. Thanks to rising crude prices, increased chances of higher inflation have been fueling the recent rally in rates.
US bond market yields continue to trend higher, but their overall movement last week was limited. Despite this limited movement, a few takeaways from the week hint at how interesting the bond markets could get in the future. The market’s reaction can be interpreted as investors seeing that the Federal Reserve will stick to its tightening stance in the future and that a change in inflation expectations will drive bond yields.
US bond market yields cooled off after hitting a four-year high at the end of April. Bond yields fell after the April employment report was lower than expected. The unemployment rate dropped below 4% for the first time in 20 years, which was the highlight of the report.
Investors poured into fixed income ETFs in April as equity market volatility jumped with several month’s leading asset-gathering ETFs being bond funds. For example, the iShares Short Treasury Bond ETF ...
The equity market has be shaken by a sudden bout of volatility, sending investors out of riskier assets and into safer plays. The shift in investment sentiment has been a huge boon for bond exchange traded ...