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Too hot, too cold; or ??? GDP relatively strong, employment numbers, inflation data at the input and consumer levels, and any other gauges watched by the FED and the 'pundits' bring different perspectives and suggestions of where to invest or what the near future will bring. As I/we don't know who is buying what or for which reason(s); I will have to remain with watching and discovering price actions with bond sectors. This doesn't really provide a proper reason to want to buy bonds now; BUT I remain inclined to have a favorable view for 2023 so far. Some folks are chasing yields wherever they find them; as the FED has continued rate increases. If the yields come from bond funds, vs MMKT; AND the FED does slow the rate increases for the next several months, then the bond fund investor should benefit from a bond price increase lending to a better return on the investment. I'm not able to have a 10 year projection, as is the case with some; so our portfolio is always subject to some changes. Our investment boat tends to be slow moving; without a lot of trading, as we no longer have the time or inclination for this activity. Dollar Cost Averaging and time (compounding) remains the best investing friend for most; including bond area participation.
Tuesday, mid-day. Equity down a bit, and IG bonds acted more traditional with yields down/prices up.
Bond yields looking forward relative to layoffs, too ??? Perhaps part of an answer. Scroll down in linked pages below for affected companies.
$U.S. value inflection point relative to both equity and bond rallies near the October 25 time frame. One would think there are other forces in play; but this may be a piece of the pie.
Relative to the below performance info for this week: Most bond returns in the list were positive this week. Several bond sectors remain with YTD returns as good as, or better than some U.S. equity sectors.
*** I was away much of the week and weekend; so not very much input. ----------------------------------------------------------------------------------------------------------------------------------------
---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
For the WEEK/YTD, NAV price changes, January 23 - January 27, 2023
***** AGAIN, this week, FZDXX, MMKT yield has remained at 4.27/8% for one month. The core Fidelity MMKT's have continued a slow creep upward to about 3.95%. The holdings of these different funds account for the variances at this time.
--- AGG = -.01% / +3.2% (I-Shares Core bond etf) widely used bond benchmark, (AAA-BBB holdings) --- MINT = +.11% / +.78% (PIMCO Enhanced short maturity, AAA-BBB rated) --- SHY = -.06% / +.69% (UST 1-3 yr bills) --- IEI = -.2% / +1.96% (UST 3-7 yr notes/bonds) --- IEF = -.15% / +3.4% (UST 7-10 yr bonds) --- TIP = +.45% / +2.54% (UST Tips, 3-10 yrs duration, some 20+ yr duration) --- VTIP = +.15% / +.86% (Vanguard Short-Term Infl-Prot Secs ETF) --- STPZ = +.14% / +.92% (UST, short duration TIPs bonds, PIMCO) --- LTPZ = +.2% / +7.55% (UST, long duration TIPs bonds, PIMCO) --- TLT = +.48% / +7.2% (I shares 20+ Yr UST Bond --- EDV = +1.1% / +9.8% (UST Vanguard extended duration bonds) --- ZROZ = +1.2 / +10.1% (UST., AAA, long duration zero coupon bonds, PIMCO --- TBT = -.9% / -13.1% (ProShares UltraShort 20+ Year Treasury (about 23 holdings) --- TMF = +1.2% / +21% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf) --- BAGIX = +.2% / +3.23% (active managed, plain vanilla, high quality bond fund) *** Other, for reference: --- HYG = -.01% / +3.44% (high yield bonds, proxy ETF) --- LQD = -.05% / +4.81% (corp. bonds, various quality) --- FZDXX = 4.28% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022. The rate of rise in the yield remained flat again this week, but not decreasing.
Comments and corrections, please. Remain curious, Catch
Layoff has spread beyond large tech companies that indicates the slowing economy. Guess the Wall Street does not care about that and they traded higher last week. Look like they are getting ahead of themselves. More earning reporting are coming now and we will have to wait and see.
Perhaps with smaller rate hikes, bonds will continue to do okay.
'Herding Cats'. In my mind, I envision perhaps 12 pieces of data that is the most important for the FED; but is also difficult to pin down for a given time frame and the FED 'watch'; to guide the economy. So, at times; the task is likely to resemble attempting to 'herd cats'. My overall quick take on the FOMC discussion period this week was a 'new' soft touch version. The first 15 minutes were 'normal' talk, the second 15 minutes were 'relaxed', a kind of 'we're going to be nice and do no harm. Disinflation was uttered by Mr. Powell.
--- Wednesday, A bond love-fest, by those so inclined, after 2:30pm FOMC Q&A. Pricing rose nicely in many bond sectors.
--- Friday. HOT! HOT! HOT! Employment: January payrolls increase 517,000 versus estimate of 188,000. This isn't a data entry error, is it? January unemployment rate falls to 3.4%, a rate last seen in 1969. January average hourly wages, +.3%. AND of course, the bond folks gave back a lot of the Wednesday love.
--- disinflation v. deflation
Deflation means prices are falling and the inflation rate is in the negative, while disinflation means a slowdown in the rate of inflation while still remaining in the positive. Disinflation occurs more commonly than deflation.
Note: On the disinflation front.....reported that chicken wings and avocado prices are down about 22% YTD; and before the Super Bowl parties, too. Big move !!! I have not verified this locally.
--- U.S.$ UP 1.22% on Friday, for a +1.02% for the week.
The Money Market thing. FZDXX and two other Fido core MM's will be receiving yield bumps, although FZDXX usually leads first. 'Course, this comes from the Fed. Funds rate hike. I'm anticipating a 4.6% yield within the next week or so; and likely that MM yields will be at 5% or more in the summer. Other investment houses will provide similar yields.
*** See FOMC thread from Wednesday and current 'Real Yield' for other bond related information.
My non-qualified quick overview: Mr. Powell would have had a different tone, during the FOMC Q&A, if the employment/labor info was released Wednesday morning. Most bond sectors, although positive for the week, gave back a lot of gains on Friday, some at -1% for the day. 'Course, profit taking should be expected, regardless of financial health reports. TIPS funds did not find love by the end of this week. Common core MM's at fund companies may find a yield of 4.5% this summer.
---------------------------------------------------------------------------------------------------------------------------------------- NOTE; An excellent request was presented to add more important bond sectors to the list. The new adds are included below.
---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
For the WEEK/YTD, NAV price changes, January 30 - Febuary 3, 2023
***** This week (Friday), FZDXX, MMKT yield moved a bit to 4.33% . The core Fidelity MMKT's have continued a slow creep upward to 4.04%. The holdings of these different funds account for the variances at this time.
--- AGG = -.02% / +3.17% (I-Shares Core bond), a benchmark, (AAA-BBB holdings) --- MINT = +.16% / +.94% (PIMCO Enhanced short maturity, AAA-BBB rated) --- SHY = -.1% / +.59% (UST 1-3 yr bills) --- IEI = -.12% / +1.84% (UST 3-7 yr notes/bonds) --- IEF = -.21% / +3.16% (UST 7-10 yr bonds) --- TIP = -.85% / +1.66% (UST Tips, 3-10 yrs duration, some 20+ yr duration) --- VTIP = -.3% / +.56% (Vanguard Short-Term Infl-Prot Secs ETF) --- STPZ = -.32% / +.6% (UST, short duration TIPs bonds, PIMCO) --- LTPZ = -2.6% / +4.7% (UST, long duration TIPs bonds, PIMCO) --- TLT = +.25% / +7.4% (I Shares 20+ Yr UST Bond --- EDV = +.48% / +10.4% (UST Vanguard extended duration bonds) --- ZROZ = +.74 / +10.9% (UST., AAA, long duration zero coupon bonds, PIMCO --- TBT = -.4% / -13.5% (ProShares UltraShort 20+ Year Treasury (about 23 holdings) --- TMF = +.22% / +21.3% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf) *** Additional important bond sectors, for reference: --- BAGIX = +.2% / +3.23% (active managed, plain vanilla, high quality bond fund) --- LQD = -.05% / +4.81% (I Shares IG, corp. bonds) --- BKLN = +.47% / +3.67% (Invesco Senior Loan, Corp. rated BB & lower) --- HYG = -.01% / +3.44% (high yield bonds, proxy ETF) --- HYD = +.4 /+4.27% (VanEck HY Muni --- MUB = +.12 /+2.45 (I Shares, National Muni Bond) --- EMB = +.02 /+4.77% (I Shares, USD, Emerging Markets Bond) --- CWB = +1.2 / +7.5% (SPDR Bloomberg Convertible Securities) --- PFF = +.76 / +10.2% (I Shares, Preferred & Income Securities) --- FZDXX = 4.33% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022. The rate of rise began an upward path again on Friday (Feb. 3).
Comments and corrections, please. Remain curious, Catch
Reported by catch22, "Note: On the disinflation front.....reported that chicken wings and avocado prices are down about 22% YTD; and before the Super Bowl parties, too. Big move !!! I have not verified this locally.
I also saw an ad in paper for chicken wings, & was surprised by the drop in price. Unfortunately that ad is in the recycle-bin , so won't be digging it out to verify the price drop.
My point, a few less chicken wings , then maybe more eggs for sale ! The current pricing is gouging !! Have a warm weekend, Derf P.S. Herding cats, one would be enough. I apologize for going off topic.
'The MFO Cafe'. Well, it's actually more of a bar and grill place. One of the old places that doesn't have all the 'hard surfaces' of the newer bar and grills with too many tv's and 12 different programs being displayed with 'no' volume. Distractions in full view. At the MFO B&G one may actually have and hear conversation without screaming. The food? A mixed bag, so to speak; but not much of the menu would be considered 'Heart Smart', but the taste of the burgers and fries are amazing; and the food/beverage choices are 'very expansive'. And if one is so inclined, a wash down with an alcohol beverage is available in many descriptions. So, I'm glad that so many meet here, at this electronic Cafe. But, it sure makes it tough for one to try to present new information. But, this is a good thing, with all of the related information and discussions.The purpose is being served here.
--- And the FED bobble-head of the week/day. Guess they just can't resist. But I've become fully tired of the endless banter; and the 'shout-outs' are not productive, IMHO. Do they continue to chatter because they're nervous about their actions?
--- Well, I keep watching for bonds and equity to have that separation, you know; that negative correlation. Crap, they're traveling together again.
--- Disinflation v Inflation snippet 2022 used car/truck prices dropped -15%, but January, 2023 used car/truck prices up +2.5%. Folks might be giving more attention to those 2023 new auto/truck MSRP's or the printing on the window label is larger and more readable; OR they're running lower on money for such an expense and no longer willing to pay up. 'Course some new car/truck financing may be higher, too. Lots of dollars, regardless; for something 'new'; relative to many other needs in life.
--- +1,932%. Well, not a profit return; but the yield increase of FZDXX and some other MMKT's from about a .22% yield in April of 2022, to date. Yield going a fair amount higher into summer time, IMHO; as the FED will continue the Fed Funds Rate.
--- Thursday. WASHINGTON, Feb 9 (Reuters) Weekly jobless claims increase 13,000 to 196,000 Four-week moving average of claims falls 2,500 to 189,250 Continuing claims rise 38,000 to 1.688 million The number of Americans filing new claims for unemployment benefits increased more than expected last week, but the underlying trend continued to point to a tight labor market. The jobs market has remained resilient despite growing economic headwinds from the Federal Reserve's interest rate increases. While labor market strength keeps the U.S. central policy on its monetary policy tightening path, it also suggests that a much anticipated recession is nowhere near.
--- U.S.$ UP +.76% for the week.
*** Bonds of most flavors got the big percent face slap this week. I'm still inclined towards IG bonds for the longer term, being year(s) not months; when the FED rates increases begin to stop and move downward. Duration right now is important for we investors, as the yield's for the short end are 'high'; as noted in the yield curve notations at MFO. At some point, when the economy finds a defined direction; longer duration will find a path. I keep watching for rotations with yields/pricing, as I lean more towards attempting to find the profit from pricing; but right now I'm happy with the +4% yields of a MMKT. This was not the case in April, 2022.
A good day to you..... ----------------------------------------------------------------------------------------------------------------------------------------
---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
For the WEEK/YTD, NAV price changes, Febuary 6 - Febuary 10, 2023
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds rate and ended the week at 4.47% . The core Fidelity MMKT's have continued a slow creep upward to 4.18%. The holdings of these different funds account for the variances at this time.
--- AGG = -1.4% / +1.72% (I-Shares Core bond), a benchmark, (AAA-BBB holdings) --- MINT = +.06% / +1% (PIMCO Enhanced short maturity, AAA-BBB rated) --- SHY = -.32% / +.27% (UST 1-3 yr bills) --- IEI = -.12% / +1.84% (UST 3-7 yr notes/bonds) --- IEF = -1.66% / +1.45% (UST 7-10 yr bonds) --- TIP = -.49% / +1.16% (UST Tips, 3-10 yrs duration, some 20+ yr duration) --- VTIP = -.02% / +.54% (Vanguard Short-Term Infl-Prot Secs ETF) --- STPZ = -.08% / +.52% (UST, short duration TIPs bonds, PIMCO) --- LTPZ = -1.5% / +3.18% (UST, long duration TIPs bonds, PIMCO) --- TLT = -3.1% / +4.1% (I Shares 20+ Yr UST Bond --- EDV = -4.3% / +5.65% (UST Vanguard extended duration bonds) --- ZROZ = -4.5 / +5.9% (UST., AAA, long duration zero coupon bonds, PIMCO --- TBT = +6.8% / -7.6% (ProShares UltraShort 20+ Year Treasury (about 23 holdings) --- TMF = -9.3% / +10% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf) *** Additional important bond sectors, for reference: --- BAGIX = -1.4% / +1.88% (active managed, plain vanilla, high quality bond fund) --- LQD = -2.5% / +2.52% (I Shares IG, corp. bonds) --- BKLN = +.0% / +3.67% (Invesco Senior Loan, Corp. rated BB & lower) --- HYG = -2.1% / +2.05% (high yield bonds, proxy ETF) --- HYD = -.74 %/+3.5% (VanEck HY Muni --- MUB = -.68% /+1.75 (I Shares, National Muni Bond) --- EMB = -2.8%/+1.86% (I Shares, USD, Emerging Markets Bond) --- CWB = -1.24% / +6.14% (SPDR Bloomberg Convertible Securities) --- PFF = -1.77% / +8.3% (I Shares, Preferred & Income Securities) --- FZDXX = 4.47% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022. Comments and corrections, please. Remain curious, Catch
Howdy, @Mark At least the electronic Cafe version is 24/7, eh? It would be informative to view a global map/list, or a broad based location map/list by numbers, of connections/visits to this site. As to the cafe reference. A pleasing dining place with comfort food. We've all discovered during travel or in our own nearby locations; those special diners or bar/grills. Not the big name or fancy places by any measure; but affordable and tummy pleasing food, which is good for the mental side of life, too. We have many such places in our area, without a long drive; and we've discovered the tiny little places while traveling the Upper Peninsula of Michigan, too. Usually a nice treat. Hey, I need to stop now; before I want to get into a story hour. From kindergarten through 4th grade, when we still had paper report cards for our grades; I always received in the 'comments' section.................'talks too much' or similar. True, but I've tried my best to 'listen well', too.
I always received in the 'comments' section.................'talks to much' or similar …
What an anachronism! You’re really dating yourself with that expression. In addition, your teacher wasn’t a very good speller. But, yes I remember the “talks too much” check-box on report cards when I was very young - and no doubt qualified.
- Bonds? My dull mind sees 3.74% on the 10-year and reacts favorably.
- Watching Bloomberg’s WSW from Friday, the lady from Invesco referred to the present as: ”The golden age of fixed-income.” Take that with a large grain of salt.
@hank I corrected the typo.....to 'too'. A lazy finger or brain while typing. And yes, one of the 'check off' boxes on the cards. I'm content to take the 4.47% 7 day yield with FZDXX OR one may have 4.14% with SPAXX or 4.18% with FDRXX MMKT's. We already hold 27% of our portfolio in IG bonds and don't plan to add more right now; unless some major event causes a 'new' look into the IG/Treasury area.
But since I mentioned the 10-year Treasury …. Mortgage rates set by banks often key-off of that rate. If I recall from refinancing, the rates are adjusted every Monday in line with how the 10-year has performed. . The 10-year represents the highest quality debt for over what I would characterize as an “intermediate” term. Very high quality corporate bonds of like duration would also react to moves in the 10-year. Their return should, however, be a bit higher.
But there’s a lot of other debt that’s little affected by what the 10-year Treasury does - like junk bonds which react more to economic conditions. And, of course, very short term investment grade debt (out to perhaps 2 or 3 years) reacts closely to the Federal Reserve mandated overnight lending rate. In a normal healthy economy, very long dated AAA bonds (20-30 years out) should earn more than what the 10-year yields. However, (without checking) it’s likely they do not currently because of the inverted yield curve.
@Sven - IG bonds fell last week in line with an uptick in yields. The uptick in 10 year treasury rates was part of that overall move. There’s a widespread misconception, I think, that the Fed is responsible for longer term rates. In reality, its influence is primarily at the very short end of the curve. The markets determine the appropriate rate out at 10-years and beyond. And that may diverge from what the Fed wants to happen.
Hi @Sven Strictly my own opinion, but as the 10 year Treasury still remains a benchmark for many forms of consumer loans, it's yield forms a benchmark for other bond yields, too. Although the yield curve that has been and is in place for some time now, fully perverts the normal historic range of yield spreads with 'somewhat normal economic conditions'; of which is not clear at this time, eh? The economy is in a 'coin toss' right now, at least for the big money and traders. I do my best to understand where the money wants to travel within bonds, not unlike equities. As with the list of bond NAV's, there are many different sectors for various needs; not unlike the 11 sectors of the SP-500, and they find there own path for a variety of reasons. For this past week, I think we find a pure profit taking event with some bonds.
For the w/e Feb. 3, LQD was +5.2%, HYG was +4.25% and AGG was +3.17%, YTD. This past week found these 3 cut in half for YTD performance. A serious 'hair cut'.
Hopefully, others will offer a viewpoint.
I've placed a link below about the large issuance of bonds early this year that may help define some of this week's sell down.
@hank, Many thanks to your info on what Fed and the market control. I too notice the 10 year treasury yield has moved up from the low 1.3% (1/5/23) to 3.74% (2/10/23), and that is sizable change in short time. High quality IG bond funds I am invested are yielding 4.0% that is encouraging from that of last year.
For the w/e Feb. 3, LQD was +5.2%, HYG was +4.25% and AGG was +3.17%, YTD. This past week found these 3 cut in half for YTD performance. A serious 'hair cut'.
@catch22, profit taking - interesting only for a small gain. Bond market this year is quite volatile even in high quality bonds including treasuries and IG bonds. I left the bond sector since fall 2021 and bought back some % this year with the yields being more attractive at about 4%. Still trying to better understand the bond volatility and opportunities to make some gain this year.
Thanks @hank. You were posting while I was in 'draft' mode and stopped for lunch. A nice add. @Sven Keep in mind that the bond list is NAV's and not total return with distributions; as this will change the gain/loss as we move through the year.
@Sven This is a chart of the 10 yr yield for the past year. Place/hover the mouse pointer anywhere on the line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date.
我能说什么 ... Wǒ néng shuō shénme (Wah nung sscho shen ma) ... What can I say.?!
'What can I say?
--- Indicating that nothing that could be said would add to or improve the situation. --- Something you say when you don't have any other good response to what someone says. --- A phrase used to emphasize the fact that one is unable to explain, excuse, or clarify something any further.
I had the 'opportunity' to live in Taiwan for two years. A busy work period; but I did attempt to study some Mandarin language; to the point of learning common phrases and words, as others may when traveling. So, the reference to the phrase; also found of use in Chinese, too.
@hank placed a quote from Bloomberg last week, and I also don't recall who stated it there: 'If your're not confused, you're not paying attention.' The original statement is placed to Tom Peters, a long time author of business modeling books. The quote is from his book, 'Thriving on Chaos: Handbook for a Management Revolution'. I still have his early work, 'In Search of Excellence' book.
Thriving on Chaos seems to be a current summation, of follow the money, in this current investing environment.
***** As to, 'What can I say': Those here who follow 'Wall St. Week' and/or 'Real Yield' should be able to absorb a decent overview of the market week. There are market pieces, here and there; that may not be covered. But, I remain limited to add more many times. I continue to discover some of the 'other'. In light of this, being redundant becomes an issue with writing. I will attempt to add something of consequence, every week, aside for the data list.
--- Tuesday, CPI: Inflation rose in January by 0.5% following a 0.1% increase in December. The CPI was up 6.4% from the same period in 2022. Both numbers were higher than expected. Across-the-board increases in shelter, food and energy boosted the index after inflation had shown signs of receding in recent months. --- Wednesday, Retail sales at 2 year high. Retail sales are mostly goods and are not adjusted for inflation. But even accounting for the technical distortions, Americans are still spending. I don't find any slack in folks going to the restaurants in our area; as they are quite busy all days of the weeks. --- Thursday, PPI (Producer Price Index) at +.7% from December. Estimate was +.4%. Jobless claims down...194,000 v 200,000 estimate. I suspect the recent layoffs are not reported by those who could claim....yet; if they received a severance payment package, etc., or they have immediate employment elsewhere.
--- Snippet: Reported that credit card debt hit $1 Trillion. Reporting agencies suggest card holders are paying off other debt or other necessary payments with cards. and not with a checking/savings account.
--- U.S.$ UP +.24% for the week, +.49% YTD
*** UST yields chart, 6 month - 30 year. This chart is active and will display a 6 month time frame going forward to a future date. Place/hover the mouse pointer anywhere on a line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date for a particular item. You may also 'right click' on the 126 days at the chart bottom to change a 'time frame' from a drop down menu. Hopefully, the line graph also lets you view the 'yield curve' in a different fashion, for the longer duration issues, at this time. Save the page to your own device for future reference.
*** Bonds of most flavors received a face slap again this week, although many bond sectors were positive on FRIDAY, easing some of the losses. I'm still inclined towards IG bonds for the longer term, being year(s) not months; when the FED rates increases begin to stop and move downward. Duration right now is important for we investors, as the yield's for the short end are 'high'; as noted in the yield curve notations at MFO. At some point, when the economy finds a defined direction; longer duration will find a path. I keep watching for rotations with yields/pricing, as I lean more towards attempting to find the profit from pricing; but right now I'm happy with the +4% yields of a MMKT. This was not the case in April, 2022.
Lastly, one may expect the FED to go back to the well of high rates, eh???; as they may not be pleased with all of the data points they gather.
A good day to you..... ----------------------------------------------------------------------------------------------------------------------------------------
---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
For the WEEK/YTD, NAV price changes, Febuary 13 - Febuary 17, 2023
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds rate and ended the week at 4.47% . The core Fidelity MMKT's have continued a slow creep upward to 4.20%. The holdings of these different funds account for the variances at this time.
--- AGG = -.43% / +1.29% (I-Shares Core bond), a benchmark, (AAA-BBB holdings) --- MINT = +.12% / +1.13% (PIMCO Enhanced short maturity, AAA-BBB rated) --- SHY = -.07% / +.2% (UST 1-3 yr bills) --- IEI = -.35% / +.2% (UST 3-7 yr notes/bonds) --- IEF = -.57% / +.87% (UST 7-10 yr bonds) --- TIP = -.21% / +.95% (UST Tips, 3-10 yrs duration, some 20+ yr duration) --- VTIP = -.04% / +.49% (Vanguard Short-Term Infl-Prot Secs ETF) --- STPZ = -.1% / +.42% (UST, short duration TIPs bonds, PIMCO) --- LTPZ = -.32% / +2.85% (UST, long duration TIPs bonds, PIMCO) --- TLT = -1% / +3.1% (I Shares 20+ Yr UST Bond --- EDV = -1.4% / +4.2% (UST Vanguard extended duration bonds) --- ZROZ = -1.47 / +4.3% (UST., AAA, long duration zero coupon bonds, PIMCO --- TBT = +2.2% / -5.6% (ProShares UltraShort 20+ Year Treasury (about 23 holdings) --- TMF = -3.5% / +6.2% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf) *** Additional important bond sectors, for reference: --- BAGIX = -.51% / +1.35% (active managed, plain vanilla, high quality bond fund) --- LQD = -.675% / +1.84% (I Shares IG, corp. bonds) --- BKLN = -.38% / +3.3% (Invesco Senior Loan, Corp. rated BB & lower) --- HYG = -.29% / +1.75% (high yield bonds, proxy ETF) --- HYD = -1.5 %/+1.95% (VanEck HY Muni --- MUB = -1.18% /+.56 (I Shares, National Muni Bond) --- EMB = -.57%/+1.27% (I Shares, USD, Emerging Markets Bond) --- CWB = +.12% / +6.27% (SPDR Bloomberg Convertible Securities) --- PFF = +.03% / +8.36% (I Shares, Preferred & Income Securities) --- FZDXX = 4.47% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022. Comments and corrections, please. Remain curious, Catch
*** Bonds of most flavors received a face slap again this week, although many bond sectors were positive on FRIDAY, easing some of the losses. I'm still inclined towards IG bonds for the longer term, being year(s) not months; when the FED rates increases begin to stop and move downward. Duration right now is important for we investors, as the yield's for the short end are 'high'; as noted in the yield curve notations at MFO. At some point, when the economy finds a defined direction; longer duration will find a path. I keep watching for rotations with yields/pricing, as I lean more towards attempting to find the profit from pricing; but right now I'm happy with the +4% yields of a MMKT. This was not the case in April, 2022.
Inflation still persists while consumer spending is healthy. The street now is expecting 3 more 25 bps rate hikes this year. All my core bond funds took a sizable hit last week. Noted that the 2 yr and 10 yr T notes are moving in recent weeks that contributed to lower bond prices. This week we are buying T bills instead as they yield close to 5%.
Rotation from larger caps to smaller ones, especially value funds net good gain this year. Not so sure with oversea markets as the conflicts in Ukraine and China continue.
This weeks one can build a nice 3 mo, 6 mo and 12 month T bill ladder with yield ranging from 4.85 - 5.0%. Since today is a holiday, Fidelity still have the auction open.
Can anyone explain what a "Government Agencies" bond is. I haven't paid attention to them on Schwab's site because treasuries have been the sweet spot, but now I see a 1 year GA at 5.37%. Does this have the same safety as a treasury?
@MikeM- Hello there- long time no talk to you. I would hazard a guess that "government agencies" would essentially be municipal bonds. For example, a government agency that supplies electricity to local customers could issue a revenue bond, with the security being underwritten by the expected revenue from the customers. Other government agencies issue bonds secured only generally by "the full faith and credit" of the issuing agency or of some "parent" government entity.
Usually the interest rate paid by such a bond will reflect the expectation of the bond market as to the probability of complete repayment of a particular issue.
Yes, these are all Federal Government Agencies. There are many "Government Agencies" other than at the Federal level. The question was a general one, so was the answer.
Comments
You've just given me some new stuff to research.
Tuesday, mid-day. Equity down a bit, and IG bonds acted more traditional with yields down/prices up.
Bond yields looking forward relative to layoffs, too ??? Perhaps part of an answer.
Scroll down in linked pages below for affected companies.
2022, U.S. Corp. layoffs
2023 U.S. Corp. layoffs, near dated
$U.S. value inflection point relative to both equity and bond rallies near the October 25 time frame. One would think there are other forces in play; but this may be a piece of the pie.
Relative to the below performance info for this week: Most bond returns in the list were positive this week. Several bond sectors remain with YTD returns as good as, or better than some U.S. equity sectors.
*** I was away much of the week and weekend; so not very much input.
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---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
For the WEEK/YTD, NAV price changes, January 23 - January 27, 2023
***** AGAIN, this week, FZDXX, MMKT yield has remained at 4.27/8% for one month. The core Fidelity MMKT's have continued a slow creep upward to about 3.95%. The holdings of these different funds account for the variances at this time.
--- AGG = -.01% / +3.2% (I-Shares Core bond etf) widely used bond benchmark, (AAA-BBB holdings)
--- MINT = +.11% / +.78% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = -.06% / +.69% (UST 1-3 yr bills)
--- IEI = -.2% / +1.96% (UST 3-7 yr notes/bonds)
--- IEF = -.15% / +3.4% (UST 7-10 yr bonds)
--- TIP = +.45% / +2.54% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- VTIP = +.15% / +.86% (Vanguard Short-Term Infl-Prot Secs ETF)
--- STPZ = +.14% / +.92% (UST, short duration TIPs bonds, PIMCO)
--- LTPZ = +.2% / +7.55% (UST, long duration TIPs bonds, PIMCO)
--- TLT = +.48% / +7.2% (I shares 20+ Yr UST Bond
--- EDV = +1.1% / +9.8% (UST Vanguard extended duration bonds)
--- ZROZ = +1.2 / +10.1% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = -.9% / -13.1% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = +1.2% / +21% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf)
--- BAGIX = +.2% / +3.23% (active managed, plain vanilla, high quality bond fund)
*** Other, for reference:
--- HYG = -.01% / +3.44% (high yield bonds, proxy ETF)
--- LQD = -.05% / +4.81% (corp. bonds, various quality)
--- FZDXX = 4.28% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022. The rate of rise in the yield remained flat again this week, but not decreasing.
Comments and corrections, please.
Remain curious,
Catch
Perhaps with smaller rate hikes, bonds will continue to do okay.
My overall quick take on the FOMC discussion period this week was a 'new' soft touch version. The first 15 minutes were 'normal' talk, the second 15 minutes were 'relaxed', a kind of 'we're going to be nice and do no harm. Disinflation was uttered by Mr. Powell.
--- Wednesday, A bond love-fest, by those so inclined, after 2:30pm FOMC Q&A. Pricing rose nicely in many bond sectors.
--- Friday. HOT! HOT! HOT! Employment: January payrolls increase 517,000 versus estimate of 188,000. This isn't a data entry error, is it? January unemployment rate falls to 3.4%, a rate last seen in 1969. January average hourly wages, +.3%. AND of course, the bond folks gave back a lot of the Wednesday love.
--- disinflation v. deflation
Deflation means prices are falling and the inflation rate is in the negative, while disinflation means a slowdown in the rate of inflation while still remaining in the positive. Disinflation occurs more commonly than deflation.
Note: On the disinflation front.....reported that chicken wings and avocado prices are down about 22% YTD; and before the Super Bowl parties, too. Big move !!! I have not verified this locally.
--- U.S.$ UP 1.22% on Friday, for a +1.02% for the week.
The Money Market thing. FZDXX and two other Fido core MM's will be receiving yield bumps, although FZDXX usually leads first. 'Course, this comes from the Fed. Funds rate hike. I'm anticipating a 4.6% yield within the next week or so; and likely that MM yields will be at 5% or more in the summer. Other investment houses will provide similar yields.
*** See FOMC thread from Wednesday and current 'Real Yield' for other bond related information.
My non-qualified quick overview: Mr. Powell would have had a different tone, during the FOMC Q&A, if the employment/labor info was released Wednesday morning. Most bond sectors, although positive for the week, gave back a lot of gains on Friday, some at -1% for the day. 'Course, profit taking should be expected, regardless of financial health reports. TIPS funds did not find love by the end of this week. Common core MM's at fund companies may find a yield of 4.5% this summer.
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NOTE; An excellent request was presented to add more important bond sectors to the list. The new adds are included below.
---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
For the WEEK/YTD, NAV price changes, January 30 - Febuary 3, 2023
***** This week (Friday), FZDXX, MMKT yield moved a bit to 4.33% . The core Fidelity MMKT's have continued a slow creep upward to 4.04%. The holdings of these different funds account for the variances at this time.
--- AGG = -.02% / +3.17% (I-Shares Core bond), a benchmark, (AAA-BBB holdings)
--- MINT = +.16% / +.94% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = -.1% / +.59% (UST 1-3 yr bills)
--- IEI = -.12% / +1.84% (UST 3-7 yr notes/bonds)
--- IEF = -.21% / +3.16% (UST 7-10 yr bonds)
--- TIP = -.85% / +1.66% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- VTIP = -.3% / +.56% (Vanguard Short-Term Infl-Prot Secs ETF)
--- STPZ = -.32% / +.6% (UST, short duration TIPs bonds, PIMCO)
--- LTPZ = -2.6% / +4.7% (UST, long duration TIPs bonds, PIMCO)
--- TLT = +.25% / +7.4% (I Shares 20+ Yr UST Bond
--- EDV = +.48% / +10.4% (UST Vanguard extended duration bonds)
--- ZROZ = +.74 / +10.9% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = -.4% / -13.5% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = +.22% / +21.3% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf)
*** Additional important bond sectors, for reference:
--- BAGIX = +.2% / +3.23% (active managed, plain vanilla, high quality bond fund)
--- LQD = -.05% / +4.81% (I Shares IG, corp. bonds)
--- BKLN = +.47% / +3.67% (Invesco Senior Loan, Corp. rated BB & lower)
--- HYG = -.01% / +3.44% (high yield bonds, proxy ETF)
--- HYD = +.4 /+4.27% (VanEck HY Muni
--- MUB = +.12 /+2.45 (I Shares, National Muni Bond)
--- EMB = +.02 /+4.77% (I Shares, USD, Emerging Markets Bond)
--- CWB = +1.2 / +7.5% (SPDR Bloomberg Convertible Securities)
--- PFF = +.76 / +10.2% (I Shares, Preferred & Income Securities)
--- FZDXX = 4.33% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022. The rate of rise began an upward path again on Friday (Feb. 3).
Comments and corrections, please.
Remain curious,
Catch
I also saw an ad in paper for chicken wings, & was surprised by the drop in price. Unfortunately that ad is in the recycle-bin , so won't be digging it out to verify the price drop.
My point, a few less chicken wings , then maybe more eggs for sale ! The current pricing is gouging !!
Have a warm weekend, Derf
P.S. Herding cats,
one would be enough.
I apologize for
going off topic.
So, I'm glad that so many meet here, at this electronic Cafe. But, it sure makes it tough for one to try to present new information. But, this is a good thing, with all of the related information and discussions.The purpose is being served here.
--- And the FED bobble-head of the week/day. Guess they just can't resist. But I've become fully tired of the endless banter; and the 'shout-outs' are not productive, IMHO. Do they continue to chatter because they're nervous about their actions?
--- Well, I keep watching for bonds and equity to have that separation, you know; that negative correlation. Crap, they're traveling together again.
--- Disinflation v Inflation snippet
2022 used car/truck prices dropped -15%, but January, 2023 used car/truck prices up +2.5%. Folks might be giving more attention to those 2023 new auto/truck MSRP's or the printing on the window label is larger and more readable; OR they're running lower on money for such an expense and no longer willing to pay up. 'Course some new car/truck financing may be higher, too. Lots of dollars, regardless; for something 'new'; relative to many other needs in life.
--- +1,932%. Well, not a profit return; but the yield increase of FZDXX and some other MMKT's from about a .22% yield in April of 2022, to date. Yield going a fair amount higher into summer time, IMHO; as the FED will continue the Fed Funds Rate.
--- Thursday. WASHINGTON, Feb 9 (Reuters) Weekly jobless claims increase 13,000 to 196,000
Four-week moving average of claims falls 2,500 to 189,250
Continuing claims rise 38,000 to 1.688 million
The number of Americans filing new claims for unemployment benefits increased more than expected last week, but the underlying trend continued to point to a tight labor market.
The jobs market has remained resilient despite growing economic headwinds from the Federal Reserve's interest rate increases. While labor market strength keeps the U.S. central policy on its monetary policy tightening path, it also suggests that a much anticipated recession is nowhere near.
--- U.S.$ UP +.76% for the week.
*** Bonds of most flavors got the big percent face slap this week. I'm still inclined towards IG bonds for the longer term, being year(s) not months; when the FED rates increases begin to stop and move downward. Duration right now is important for we investors, as the yield's for the short end are 'high'; as noted in the yield curve notations at MFO. At some point, when the economy finds a defined direction; longer duration will find a path. I keep watching for rotations with yields/pricing, as I lean more towards attempting to find the profit from pricing; but right now I'm happy with the +4% yields of a MMKT. This was not the case in April, 2022.
A good day to you.....
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---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
For the WEEK/YTD, NAV price changes, Febuary 6 - Febuary 10, 2023
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds rate and ended the week at 4.47% . The core Fidelity MMKT's have continued a slow creep upward to 4.18%. The holdings of these different funds account for the variances at this time.
--- AGG = -1.4% / +1.72% (I-Shares Core bond), a benchmark, (AAA-BBB holdings)
--- MINT = +.06% / +1% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = -.32% / +.27% (UST 1-3 yr bills)
--- IEI = -.12% / +1.84% (UST 3-7 yr notes/bonds)
--- IEF = -1.66% / +1.45% (UST 7-10 yr bonds)
--- TIP = -.49% / +1.16% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- VTIP = -.02% / +.54% (Vanguard Short-Term Infl-Prot Secs ETF)
--- STPZ = -.08% / +.52% (UST, short duration TIPs bonds, PIMCO)
--- LTPZ = -1.5% / +3.18% (UST, long duration TIPs bonds, PIMCO)
--- TLT = -3.1% / +4.1% (I Shares 20+ Yr UST Bond
--- EDV = -4.3% / +5.65% (UST Vanguard extended duration bonds)
--- ZROZ = -4.5 / +5.9% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = +6.8% / -7.6% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = -9.3% / +10% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf)
*** Additional important bond sectors, for reference:
--- BAGIX = -1.4% / +1.88% (active managed, plain vanilla, high quality bond fund)
--- LQD = -2.5% / +2.52% (I Shares IG, corp. bonds)
--- BKLN = +.0% / +3.67% (Invesco Senior Loan, Corp. rated BB & lower)
--- HYG = -2.1% / +2.05% (high yield bonds, proxy ETF)
--- HYD = -.74 %/+3.5% (VanEck HY Muni
--- MUB = -.68% /+1.75 (I Shares, National Muni Bond)
--- EMB = -2.8%/+1.86% (I Shares, USD, Emerging Markets Bond)
--- CWB = -1.24% / +6.14% (SPDR Bloomberg Convertible Securities)
--- PFF = -1.77% / +8.3% (I Shares, Preferred & Income Securities)
--- FZDXX = 4.47% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022.
Comments and corrections, please.
Remain curious,
Catch
As to the cafe reference. A pleasing dining place with comfort food. We've all discovered during travel or in our own nearby locations; those special diners or bar/grills. Not the big name or fancy places by any measure; but affordable and tummy pleasing food, which is good for the mental side of life, too. We have many such places in our area, without a long drive; and we've discovered the tiny little places while traveling the Upper Peninsula of Michigan, too. Usually a nice treat.
Hey, I need to stop now; before I want to get into a story hour. From kindergarten through 4th grade, when we still had paper report cards for our grades; I always received in the 'comments' section.................'talks too much' or similar.
What an anachronism! You’re really dating yourself with that expression. In addition, your teacher wasn’t a very good speller.
- Bonds? My dull mind sees 3.74% on the 10-year and reacts favorably.
- Watching Bloomberg’s WSW from Friday, the lady from Invesco referred to the present as: ”The golden age of fixed-income.” Take that with a large grain of salt.
I'm content to take the 4.47% 7 day yield with FZDXX OR one may have 4.14% with SPAXX or 4.18% with FDRXX MMKT's. We already hold 27% of our portfolio in IG bonds and don't plan to add more right now; unless some major event causes a 'new' look into the IG/Treasury area.
Question: is there a correlation between 10 year treasury yield to the rest of bond market? This past week there is a pullback on IG bonds.
But since I mentioned the 10-year Treasury …. Mortgage rates set by banks often key-off of that rate. If I recall from refinancing, the rates are adjusted every Monday in line with how the 10-year has performed. . The 10-year represents the highest quality debt for over what I would characterize as an “intermediate” term. Very high quality corporate bonds of like duration would also react to moves in the 10-year. Their return should, however, be a bit higher.
But there’s a lot of other debt that’s little affected by what the 10-year Treasury does - like junk bonds which react more to economic conditions. And, of course, very short term investment grade debt (out to perhaps 2 or 3 years) reacts closely to the Federal Reserve mandated overnight lending rate. In a normal healthy economy, very long dated AAA bonds (20-30 years out) should earn more than what the 10-year yields. However, (without checking) it’s likely they do not currently because of the inverted yield curve.
@Sven - IG bonds fell last week in line with an uptick in yields. The uptick in 10 year treasury rates was part of that overall move. There’s a widespread misconception, I think, that the Fed is responsible for longer term rates. In reality, its influence is primarily at the very short end of the curve. The markets determine the appropriate rate out at 10-years and beyond. And that may diverge from what the Fed wants to happen.
Strictly my own opinion, but as the 10 year Treasury still remains a benchmark for many forms of consumer loans, it's yield forms a benchmark for other bond yields, too. Although the yield curve that has been and is in place for some time now, fully perverts the normal historic range of yield spreads with 'somewhat normal economic conditions'; of which is not clear at this time, eh? The economy is in a 'coin toss' right now, at least for the big money and traders. I do my best to understand where the money wants to travel within bonds, not unlike equities.
As with the list of bond NAV's, there are many different sectors for various needs; not unlike the 11 sectors of the SP-500, and they find there own path for a variety of reasons.
For this past week, I think we find a pure profit taking event with some bonds.
For the w/e Feb. 3, LQD was +5.2%, HYG was +4.25% and AGG was +3.17%, YTD. This past week found these 3 cut in half for YTD performance. A serious 'hair cut'.
Hopefully, others will offer a viewpoint.
I've placed a link below about the large issuance of bonds early this year that may help define some of this week's sell down.
Record global bond issuance to start 2023.
@Sven Keep in mind that the bond list is NAV's and not total return with distributions; as this will change the gain/loss as we move through the year.
This is a chart of the 10 yr yield for the past year. Place/hover the mouse pointer anywhere on the line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date.
'What can I say?
--- Indicating that nothing that could be said would add to or improve the situation.
--- Something you say when you don't have any other good response to what someone says.
--- A phrase used to emphasize the fact that one is unable to explain, excuse, or clarify something any further.
I had the 'opportunity' to live in Taiwan for two years. A busy work period; but I did attempt to study some Mandarin language; to the point of learning common phrases and words, as others may when traveling. So, the reference to the phrase; also found of use in Chinese, too.
@hank placed a quote from Bloomberg last week, and I also don't recall who stated it there: 'If your're not confused, you're not paying attention.' The original statement is placed to Tom Peters, a long time author of business modeling books. The quote is from his book, 'Thriving on Chaos: Handbook for a Management Revolution'. I still have his early work, 'In Search of Excellence' book.
Thriving on Chaos seems to be a current summation, of follow the money, in this current investing environment.
***** As to, 'What can I say': Those here who follow 'Wall St. Week' and/or 'Real Yield' should be able to absorb a decent overview of the market week. There are market pieces, here and there; that may not be covered. But, I remain limited to add more many times. I continue to discover some of the 'other'. In light of this, being redundant becomes an issue with writing. I will attempt to add something of consequence, every week, aside for the data list.
--- Tuesday, CPI: Inflation rose in January by 0.5% following a 0.1% increase in December.
The CPI was up 6.4% from the same period in 2022. Both numbers were higher than expected.
Across-the-board increases in shelter, food and energy boosted the index after inflation had shown signs of receding in recent months.
--- Wednesday, Retail sales at 2 year high. Retail sales are mostly goods and are not adjusted for inflation. But even accounting for the technical distortions, Americans are still spending. I don't find any slack in folks going to the restaurants in our area; as they are quite busy all days of the weeks.
--- Thursday, PPI (Producer Price Index) at +.7% from December. Estimate was +.4%. Jobless claims down...194,000 v 200,000 estimate. I suspect the recent layoffs are not reported by those who could claim....yet; if they received a severance payment package, etc., or they have immediate employment elsewhere.
--- Snippet: Reported that credit card debt hit $1 Trillion. Reporting agencies suggest card holders are paying off other debt or other necessary payments with cards. and not with a checking/savings account.
--- U.S.$ UP +.24% for the week, +.49% YTD
*** UST yields chart, 6 month - 30 year. This chart is active and will display a 6 month time frame going forward to a future date. Place/hover the mouse pointer anywhere on a line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date for a particular item. You may also 'right click' on the 126 days at the chart bottom to change a 'time frame' from a drop down menu. Hopefully, the line graph also lets you view the 'yield curve' in a different fashion, for the longer duration issues, at this time. Save the page to your own device for future reference.
*** Bonds of most flavors received a face slap again this week, although many bond sectors were positive on FRIDAY, easing some of the losses. I'm still inclined towards IG bonds for the longer term, being year(s) not months; when the FED rates increases begin to stop and move downward. Duration right now is important for we investors, as the yield's for the short end are 'high'; as noted in the yield curve notations at MFO. At some point, when the economy finds a defined direction; longer duration will find a path. I keep watching for rotations with yields/pricing, as I lean more towards attempting to find the profit from pricing; but right now I'm happy with the +4% yields of a MMKT. This was not the case in April, 2022.
Lastly, one may expect the FED to go back to the well of high rates, eh???; as they may not be pleased with all of the data points they gather.
A good day to you.....
----------------------------------------------------------------------------------------------------------------------------------------
---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
For the WEEK/YTD, NAV price changes, Febuary 13 - Febuary 17, 2023
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds rate and ended the week at 4.47% . The core Fidelity MMKT's have continued a slow creep upward to 4.20%. The holdings of these different funds account for the variances at this time.
--- AGG = -.43% / +1.29% (I-Shares Core bond), a benchmark, (AAA-BBB holdings)
--- MINT = +.12% / +1.13% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = -.07% / +.2% (UST 1-3 yr bills)
--- IEI = -.35% / +.2% (UST 3-7 yr notes/bonds)
--- IEF = -.57% / +.87% (UST 7-10 yr bonds)
--- TIP = -.21% / +.95% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- VTIP = -.04% / +.49% (Vanguard Short-Term Infl-Prot Secs ETF)
--- STPZ = -.1% / +.42% (UST, short duration TIPs bonds, PIMCO)
--- LTPZ = -.32% / +2.85% (UST, long duration TIPs bonds, PIMCO)
--- TLT = -1% / +3.1% (I Shares 20+ Yr UST Bond
--- EDV = -1.4% / +4.2% (UST Vanguard extended duration bonds)
--- ZROZ = -1.47 / +4.3% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = +2.2% / -5.6% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = -3.5% / +6.2% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf)
*** Additional important bond sectors, for reference:
--- BAGIX = -.51% / +1.35% (active managed, plain vanilla, high quality bond fund)
--- LQD = -.675% / +1.84% (I Shares IG, corp. bonds)
--- BKLN = -.38% / +3.3% (Invesco Senior Loan, Corp. rated BB & lower)
--- HYG = -.29% / +1.75% (high yield bonds, proxy ETF)
--- HYD = -1.5 %/+1.95% (VanEck HY Muni
--- MUB = -1.18% /+.56 (I Shares, National Muni Bond)
--- EMB = -.57%/+1.27% (I Shares, USD, Emerging Markets Bond)
--- CWB = +.12% / +6.27% (SPDR Bloomberg Convertible Securities)
--- PFF = +.03% / +8.36% (I Shares, Preferred & Income Securities)
--- FZDXX = 4.47% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022.
Comments and corrections, please.
Remain curious,
Catch
Rotation from larger caps to smaller ones, especially value funds net good gain this year. Not so sure with oversea markets as the conflicts in Ukraine and China continue.
Ditto. With earlier bills rolling off over the next few months, the higher yields on bills here will give a nice boost to portfolio yield.
Also don’t forget to check out the CDs too.
Usually the interest rate paid by such a bond will reflect the expectation of the bond market as to the probability of complete repayment of a particular issue.
Federal Agencies: Ginnie Mae, TVA, FHA, SBA