I have been bearish on bonds for months now and the breakdown seen in June has been negated. Not only that, but it looks as if a new short-term uptrend has begun, too. So much for rising rates...or is it?
While Treasuries are seeing lots of buying, both high quality corporate bonds are still being sold and high yield, aka low quality corporate bonds are being sold with a vengeance. To me that means flight to quality, not a bad call on interest rates.
Yes, it is the treasury market that sets the tone for rates but the action in the corporate market is telling us that something is not quite right. Maybe it is not inflation. Maybe it is just lousy earnings prospects and either way I do not want to get locked into any long-term maturities.
1 comment:
Out of many methods you can invest your money municipal bond rates happen to be one of the famous. However when you invest in Municipal Bonds you have to be aware of municipal bond rates too. Municipal bonds rating indicate the merit of municipal bonds which depends on whether the bond is backed by the full faith, credit, and taxing powers of the municipality or by revenues generated by the municipal facility the bond issue finances. Consider issuer-specific information such as the wealth of the community, characteristic of the issuer, revenue stream of the project the bond is used to fund. By examining the municipal bond, you can see if it should have high ratings or low based on the factors above.
Post a Comment