New issue market reaches new volume records
Declining rates have boosted investment-grade securities, but the energy sector's woes have held back high-yield bonds.
China cuts interest rates and ECB pledges to ramp up its stimulus programs.
GDP and inflation pick up in euro area, which may keep ECB monetary policy on hold.
Economic metrics keep Fed on autopilot; ECB intimates more QE is coming.
Although spreads could grind a bit tighter in the near term, rising interest rates will be a headwind.
GDP grows 3.5%, but is likely to moderate in the fourth quarter.
Tech investors burned by earnings disappointments and recapitalization.
Only best-known issuers with strong balance sheets dared tap the new issue market.
While marriages are increasing in the health-care sector, conscious uncoupling increases in the technology sector.
But market rebound isn't enough to offset losses experienced earlier in the week.
Investment-grade bonds will likely continue to struggle as rates rise, but high-yield bonds should hold their value better.
Widening high-yield spreads will start to attract investors.
With interest rates poised to rise further and credit spreads near their tightest levels since the end of the 2008–09 credit crisis, we expect rising rates to largely offset the yield that investment-grade corporate bonds currently offer.
New Best Idea highlighted, but otherwise, value hard to find.
Credit spreads were unable to hold their ground last week.
Credit spreads holding steady despite new issue supply.
Although investment-grade bonds have performed better recently, we expect high-yield bonds to hold their value better in the medium term as rates rise and the economy continues to grow.
Economic indicators released last week indicate that US economy is continuing to expand at a moderate pace.
Going forward, the corporate bond market will be much more closely tied to Treasury-bond returns than in the past, says Morningstar's Dave Sekera.
As credit spreads have tightened on a nearly continuous trend over the past year, they are becoming richly valued relative to their historical average.
Corporate credit spreads are at very tight levels but have little room to further narrow the gap.
The best 2014 outcome investors can hope for regarding investment-grade corporate bonds is the current yield.
Due to the Fed taper and expected rise in interest rates, corporate-bond investments likely have little room to grow for the remainder of the year.
New issue supply fell well short of demand to put money to work last week.
This brewer offers bond investors good value for their money, with its structural competitive advantages that provide a strong financial foundation for the long term.
Corporate credit spreads are fairly valued--albeit at the tight end of the range that we view as fairly valued.
The buy-the-dip crowd was in full force as corporate spreads tightened, but the dips have become increasingly shallow and almost imperceptible on a long-term chart.
The market seems to believe that any potential contagion from the situation in the Ukraine or economic weakness in China will be extremely limited in the United States.
Strong job growth sent Treasury rates upward, but corporate credit spreads held steady on a flood of new issues.
The corporate bond index will struggle to return more than the 2% it already has this year given the likelihood of rising long-term rates and today's historically low credit spreads.
The impact from the emerging-markets disruption barely dented the corporate bond market.
Headline payrolls numbers disappointed last week, but the bond markets rallied on underlying private-sector strength
At this point, the instability appears to be contained in relatively small geographic regions.
We continue to view credit spreads as fairly valued, albeit at the tight end of the range that we see as appropriate, given our economic outlook.
Corporate bond trading activity was relatively light as many investors decided to wait for the calendar to build this week as reporting season ramps up.
It was back to the grind last week as traders and portfolio managers returned to their desks after the holidays for the first full trading week of the year.
From a fundamental viewpoint, while credit spreads may continue to grind tighter in the short term, we think the preponderance of credit spread tightening has run its course.
The corporate bond market will probably struggle to return much above break-even in 2014.
Corporate bonds reacted positively last week to the Fed's assurances that it will keep its key interest rate lower for longer.
But from a fundamental viewpoint, we think the preponderance of credit spread tightening has run its course.
It appears that the corporate-bond market believes Friday's jobs report was high enough to suggest an advancing economy, but not so strong as to prompt a Fed taper.
So long as the Fed's asset-purchase program is running full speed ahead, it will provide a ceiling on how much long-term rates can rise and will help push credit spreads tighter over time.
After suffering from the sharp increase in interest rates and widening credit spreads this summer, investors are hesitant to pay tighter credit spreads for longer-dated corporate bonds.
Stronger-than-expected economic indicators prompted investors to rethink when the Federal Reserve may begin to taper its asset-purchase program.
So long as the Fed continues its asset-purchase program at the current run rate, we don't expect interest rates to rise meaningfully and think they will remain range-bound.
The demand for corporate bonds should push corporate credit spreads tighter, says Morningstar's Dave Sekera.
With the government back to work and the debt ceiling suspended, the political rhetoric emanating from Washington will subside and allow investors to concentrate on third-quarter earnings and fourth-quarter forecasts.
The buy-the-dip mentality is alive and well as portfolio managers are for the most part ignoring the political antics, trying their best to pretend it's not happening.