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Gett'in another wagon to haul the money; and what about those pesky bond yields, eh?

catch22catch22
in Fund Discussions
Saturday morn'in to you,

So, a tiny bit on the "tongue in cheek" side of life; although reality tends to sneak in when we're not paying attention, eh?
Not too low on coffee this AM; but must get outside, as Michigan weather is glorious right now for most of the state, so a few quick notes or observations.

So, not much to add about the equity sector, eh? Ya'll are watching what you choose to see for returns YTD for your particular holdings. Exceptions being the commodities areas which are not having as much fun right now. I noted a few days ago about the below "bold" and the so-called defensive area equities moving up more than some other equity sectors. These have not sold back to end the week (Friday, June 2 closing values).

Sector summary
Sector Change % down / up
Energy -0.81%
Basic Materials +0.14%
Industrials +0.50%
Cyclical Cons. Goods ... +0.27%
Non-Cyclical Cons. Goods... +0.75%
Financials +0.19%
Healthcare +0.74%
Technology +1.02%
Telecommunications Ser... +0.17%
Utilities +0.02%

As to those pesky low bond yields. Well, we know lower yields = higher prices, and so a bit of money is being made here, too. The 10 year Treasury yield closed at 2.16% and the 30 year closed at 2.81% this week (list below, including shorter term yields and price moves for Friday, June 2.

These 3 etf's and closing percentage up for the week ending Friday, June 2.

LQD +0.8%
IEF +0.7%
EDV +2.7%

Yields as of June 2.

3 Month 0.95% +0.01 (1.06%)
6 Month 1.03% +0.01 (0.98%)
2 Year 1.29% +0.01 (0.78%)
5 Year 1.72% 0.00 (0.00%)
10 Year 2.16% -0.01 (-0.46%)
30 Year 2.81% -0.02 (-0.71%)

This link from Jan. 26, 2004 through June 2, 2017 is for "yield" not pricing. So, I'm sitting here looking at this chart and wondering if that 2 year yield path has any meaning relative to the 10 and 30 year yields, based upon prior years. Should this chart be showing me anything about short term rates and how they moved in early 2008 or any other periods that are of value today?

http://stockcharts.com/freecharts/perf.php?$UST2Y,$UST10Y,$UST30Y&n=3334&O=011000

What could be a meaningful summary of all the above? IF the equity players decide to "take the money and run"; one can imagine a move into the "safe havens", eh? Who is to say that such a move would not find the 10 year yield at .5% and the 30 year at 1.1%. These yields are still attractive relative to Japan and the Eurozone, yes?

Global 10 year yields

The marketplace is re-balancing our portfolio from a 60/40 equity/bond to a +70/30 and we're letting it ride; hoping to get out of the way if needed.

Well, we still live in interesting times; don't you agree?

Have a pleasant remainder.....
Catch


Comments

  • Sven
    @catch22,

    Good morning. I noticed too the recent drop of domestic bond yield. Recently, I ventured back to EM debts (EMB and Pimco Emerging Local bond, PELBX) in small allocation.

    Let hope your 73/30 allocation work out.
  • [Deleted User]
    The user and all related content has been deleted.
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