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@AndyJ Knowing the yields dropped in very large basis points, Friday and again, so far today; the yield chart link included in this last post will provide quite the 'view' when updated after the market close today (Monday).
Yesterday I looked at Schwab to buy a few more Treasuries, but that facility "wasn't available" until the start of business today. They knew what was coming.
@AndyJ Knowing the yields dropped in very large basis points, Friday and again, so far today; the yield chart link included in this last post will provide quite the 'view' when updated after the market close today (Monday).
Yep, @Catch, there are some elegant waterfalls on the right side of that chart.
Hi @AndyJ I just looked at the 1yr UST, in particular, and from March 8 (Wednesday) through today, March 13 (Monday) finds a -18.1% yield drop. One heck of a swing for UST yield in a short time frame.
Bond market volatility since last week has been VERY high - first, Powell's talks, then, 3 bank failures in 4 days, and then, the rescue package. MOVE was 173.59 today. Even the 3-mo T-Bills had noticeable rate changes from the market open to their auction time.
Since yesterday CD yield is moving up instead of down as those in T bills. Call-protected 12 months CDs yielding 5.30% are available at Fidelity (expect to be the same at Schwab and other brokerages).
Ongoing accolades for everyone writing in the MFO monthly commentaries. BUT, in particular for this past week, are very large accolades to everyone who spent a lot of time researching articles and information -as it happened-, attempting to keep pace with hourly/daily changes with actions taken by the FED, Treasury and FDIC. Many conversations, for sure. The MFO community spent a lot of time considering which information was pertinent and then having to discover which information was valid for posting; as well as many excellent insights, opinions and suggestions. In many cases, it takes a lot of time to find, digest and post a link. The past week's events, as chronicled here, were like to reading a book, as it was being written. Such a fine fellowship with this investment group, to be associated with.
THANK YOU ALL.......
--- Will or should the FDIC insurance limit be adjusted upward again? During the 2008 market melt, the insurance was adjusted from $100,000 to $250,000. This amount was made permanent with legislation in 2010. Perhaps this amount should be linked to Bureau of Labor data for CPI, as with Social Security, for annual adjustments. If this method was in place now, the $250,000 limit (2010) would be $344,000 today. Well, a thought and perhaps an assurance for the public.
Equity losers short list for the week, which this week includes many banks, as well as insurance companies, etc. Select/click onto a particular equity. The List is at one day, however select the 5Day or YTD for other time frames. This is a Google link, for those who are averse to traveling to such a site. Although an equity list, reflects what has taken place this past week and is relative to bond yield/pricing.
--- Those MMKT's. Stagnant yields again this week, as they've hit a plateau; but most still having a yield between 4.2 and 4.5%, unless it's a magic sauce MMKT. Perhaps another bump up in yields IF/when the FED raises rates again. Some funds may show a change of a few 1/100s% upward this week.
--- U.S.$ DOWN -.76% for the week, +.10% YTD flat
*** 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. NOTE: take a peek at the right side of this graph to find the yield swings of the past week.
--- The NAV's list below reflects the week ending, but doesn't reveal the large daily swings throughout the week. IG bond 'yields' ended with large down moves from a flight to safety from the failure of SVB. However, many non-IG bond funds remain with large yields, if one chooses to travel that path. Those more connected to the stock market and equity in general, had some difficulty with positive pricing.
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, March 13 - March 17, 2023
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds/repo/SOFR rates and ended the week at 4.46% (flat lined now). The core Fidelity MMKT's have continued a slow creep upward to 4.22%. The holdings of these different funds account for the variances at this time.
--- AGG = +1.44% / +3.09% (I-Shares Core bond), a benchmark, (AAA-BBB holdings) --- MINT = -.14% / +1.12% (PIMCO Enhanced short maturity, AAA-BBB rated) --- SHY = +1.31% / +1.75% (UST 1-3 yr bills) --- IEI = +1.88% / +2.8% (UST 3-7 yr notes/bonds) --- IEF = +1.98% / +4.07% (UST 7-10 yr bonds) --- TIP = +.49% / +2.05% (UST Tips, 3-10 yrs duration, some 20+ yr duration) --- VTIP = +.89% / +1.52% (Vanguard Short-Term Infl-Prot Secs ETF) --- STPZ = +.96% / +1.42% (UST, short duration TIPs bonds, PIMCO) --- LTPZ = -1.7% / +3.37% (UST, long duration TIPs bonds, PIMCO) --- TLT = +1.19% / +7.76% (I Shares 20+ Yr UST Bond --- EDV = +1.16% / +10.25% (UST Vanguard extended duration bonds) --- ZROZ = +.52% / +10.5% (UST., AAA, long duration zero coupon bonds, PIMCO --- TBT = -2.5% / -14.% (ProShares UltraShort 20+ Year Treasury (about 23 holdings) --- TMF = +3.05% / +19.6% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf) *** Additional important bond sectors, for reference: --- BAGIX = +1.03% / +2.88% (active managed, plain vanilla, high quality bond fund) --- LQD = +1.1% / +3.11% (I Shares IG, corp. bonds) --- BKLN = -1.87% / +1.16% (Invesco Senior Loan, Corp. rated BB & lower) --- HYG = -.1% / +.73% (high yield bonds, proxy ETF) --- HYD = +.04%/+1.67% (VanEck HY Muni) --- MUB = +.93% /+1.98% (I Shares, National Muni Bond) --- EMB = -.94%/+.34% (I Shares, USD, Emerging Markets Bond) --- CWB = -1.05% / +1.34% (SPDR Bloomberg Convertible Securities) --- PFF = -3.19% / -.02% (I Shares, Preferred & Income Securities) --- FZDXX = 4.46% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022.
Comments and corrections, please. Remain curious, Catch
HIATUS March 24, 2023. Too many items, for me, on the table, at this time. The daily posts here provide an ample amount of quality discussions regarding bonds and income related, to which; I can not add additional meaningful information. One has a list of referenced bond tickers, from the posts, in this thread, to readily and easily search movements for your own interests. FWIW. Going forward into this year remaining; quality equity (if not caught within a broad train wreck in other sectors) should maintain, and IG bonds (corp. and gov't issues) may find profits from pricing from falling yields. As the 'unintended' consequences of FED rate hikes to remove workers from their jobs in order to increase unemployment, as well as attain a 2% inflation rate; has 'leaked' into the banking system; this outcome suggests the future investment market place may find more 'Catch-22's' lurking.
The UST yields chart link from previous posts will continue to auto-update with a correct 6 month time frame.
Bond market and forward curve pricing a recession in which Fed will be forced to cut. With the headline news of bank stress and significant layoffs (especially in Tech and Services such as Accenture) creates a reinforcing loop. Further, as I mentioned in my call last week the ugly upside down commercial real estate market is looming.
That said, I suspect the new trend in lending of existing debt will be amend and extend to push out maturities and a day of reckoning. Similar to the "mark-to-market" losses from rising interest rates, the community will hope rates reverse and time heals.
Sticking my neck out .... I still believe the forward yield curve is too extreme in rate expectations. And, I continue to believe that "rates will stay higher for longer" unless systematic risk becomes real. However, the deposit runs on banks is an easy policy fix (but may not be executed). The bigger issue will be the "shadow banking". As of now I am sticking with my guns but reserve the right to be wrong and pivot. Besides, if rates come down quickly, I would rather deal with underperformance and lack of long duration convexity resulting in less performance versus the alternative of being right and betting the opposite.
Hi @davidrmoran Thanks for the link. I was able to 'sneak in' to read the article. I didn't think the monies our households added would place such a big bump into Fido's MMKT funds.
From the article: While government money market funds aren’t insured, their holdings are considered super-safe: cash, US Treasuries and related debt, and securities issued or guaranteed by the US government or its agencies.
Remember: While you can withdraw at any time, money fund yields fluctuate along with Treasury market interest rates. To lock in a yield you’ll need to tie up your money for a stretch.
--- Not the best of writing in the bold above and misleading. The yields are more the result of FED funds rates, which does affect Treasury interest rates; AND there IS NOT a lock in period. Three of the common MMKT's at FIDO find one FZDXX that has to be bought and sold like a mutual fund; while core MMKT's of SPAXX and FDRXX are commonly linked directly to one's brokerage/MF account. NONE of them need to be held for 'X' period of time to obtain the yield. As of today, March 28, the following yields apply: --- FZDXX = 4.59% --- FDRXX = 4.43% --- SPAXX = 4.40%
PRTXX. 4.3% today. ...That's the fund in my sweep account. I just received a promo email from lovely TRP, inviting me to make use of the fund. All kinds of fine-print disclaimers at the bottom of the message.
Comments
Ongoing accolades for everyone writing in the MFO monthly commentaries. BUT, in particular for this past week, are very large accolades to everyone who spent a lot of time researching articles and information -as it happened-, attempting to keep pace with hourly/daily changes with actions taken by the FED, Treasury and FDIC. Many conversations, for sure.
The MFO community spent a lot of time considering which information was pertinent and then having to discover which information was valid for posting; as well as many excellent insights, opinions and suggestions. In many cases, it takes a lot of time to find, digest and post a link. The past week's events, as chronicled here, were like to reading a book, as it was being written.
Such a fine fellowship with this investment group, to be associated with.
THANK YOU ALL.......
--- Will or should the FDIC insurance limit be adjusted upward again? During the 2008 market melt, the insurance was adjusted from $100,000 to $250,000. This amount was made permanent with legislation in 2010. Perhaps this amount should be linked to Bureau of Labor data for CPI, as with Social Security, for annual adjustments. If this method was in place now, the $250,000 limit (2010) would be $344,000 today. Well, a thought and perhaps an assurance for the public.
Equity losers short list for the week, which this week includes many banks, as well as insurance companies, etc. Select/click onto a particular equity. The List is at one day, however select the 5Day or YTD for other time frames. This is a Google link, for those who are averse to traveling to such a site. Although an equity list, reflects what has taken place this past week and is relative to bond yield/pricing.
--- Those MMKT's. Stagnant yields again this week, as they've hit a plateau; but most still having a yield between 4.2 and 4.5%, unless it's a magic sauce MMKT. Perhaps another bump up in yields IF/when the FED raises rates again. Some funds may show a change of a few 1/100s% upward this week.
--- U.S.$ DOWN -.76% for the week, +.10% YTD flat
*** 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. NOTE: take a peek at the right side of this graph to find the yield swings of the past week.
--- The NAV's list below reflects the week ending, but doesn't reveal the large daily swings throughout the week. IG bond 'yields' ended with large down moves from a flight to safety from the failure of SVB. However, many non-IG bond funds remain with large yields, if one chooses to travel that path. Those more connected to the stock market and equity in general, had some difficulty with positive pricing.
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, March 13 - March 17, 2023
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds/repo/SOFR rates and ended the week at 4.46% (flat lined now). The core Fidelity MMKT's have continued a slow creep upward to 4.22%. The holdings of these different funds account for the variances at this time.
--- AGG = +1.44% / +3.09% (I-Shares Core bond), a benchmark, (AAA-BBB holdings)
--- MINT = -.14% / +1.12% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = +1.31% / +1.75% (UST 1-3 yr bills)
--- IEI = +1.88% / +2.8% (UST 3-7 yr notes/bonds)
--- IEF = +1.98% / +4.07% (UST 7-10 yr bonds)
--- TIP = +.49% / +2.05% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- VTIP = +.89% / +1.52% (Vanguard Short-Term Infl-Prot Secs ETF)
--- STPZ = +.96% / +1.42% (UST, short duration TIPs bonds, PIMCO)
--- LTPZ = -1.7% / +3.37% (UST, long duration TIPs bonds, PIMCO)
--- TLT = +1.19% / +7.76% (I Shares 20+ Yr UST Bond
--- EDV = +1.16% / +10.25% (UST Vanguard extended duration bonds)
--- ZROZ = +.52% / +10.5% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = -2.5% / -14.% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = +3.05% / +19.6% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf)
*** Additional important bond sectors, for reference:
--- BAGIX = +1.03% / +2.88% (active managed, plain vanilla, high quality bond fund)
--- LQD = +1.1% / +3.11% (I Shares IG, corp. bonds)
--- BKLN = -1.87% / +1.16% (Invesco Senior Loan, Corp. rated BB & lower)
--- HYG = -.1% / +.73% (high yield bonds, proxy ETF)
--- HYD = +.04%/+1.67% (VanEck HY Muni)
--- MUB = +.93% /+1.98% (I Shares, National Muni Bond)
--- EMB = -.94%/+.34% (I Shares, USD, Emerging Markets Bond)
--- CWB = -1.05% / +1.34% (SPDR Bloomberg Convertible Securities)
--- PFF = -3.19% / -.02% (I Shares, Preferred & Income Securities)
--- FZDXX = 4.46% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022.
Comments and corrections, please.
Remain curious,
Catch
FWIW. Going forward into this year remaining; quality equity (if not caught within a broad train wreck in other sectors) should maintain, and IG bonds (corp. and gov't issues) may find profits from pricing from falling yields. As the 'unintended' consequences of FED rate hikes to remove workers from their jobs in order to increase unemployment, as well as attain a 2% inflation rate; has 'leaked' into the banking system; this outcome suggests the future investment market place may find more 'Catch-22's' lurking.
The UST yields chart link from previous posts will continue to auto-update with a correct 6 month time frame.
Take care and remain curious,
Catch
That said, I suspect the new trend in lending of existing debt will be amend and extend to push out maturities and a day of reckoning. Similar to the "mark-to-market" losses from rising interest rates, the community will hope rates reverse and time heals.
Sticking my neck out .... I still believe the forward yield curve is too extreme in rate expectations. And, I continue to believe that "rates will stay higher for longer" unless systematic risk becomes real. However, the deposit runs on banks is an easy policy fix (but may not be executed). The bigger issue will be the "shadow banking". As of now I am sticking with my guns but reserve the right to be wrong and pivot. Besides, if rates come down quickly, I would rather deal with underperformance and lack of long duration convexity resulting in less performance versus the alternative of being right and betting the opposite.
https://www.bostonglobe.com/2023/03/28/business/fidelitys-money-funds-are-killing-it/
From the article:
While government money market funds aren’t insured, their holdings are considered super-safe: cash, US Treasuries and related debt, and securities issued or guaranteed by the US government or its agencies.
Remember: While you can withdraw at any time, money fund yields fluctuate along with Treasury market interest rates. To lock in a yield you’ll need to tie up your money for a stretch.
--- Not the best of writing in the bold above and misleading. The yields are more the result of FED funds rates, which does affect Treasury interest rates; AND there IS NOT a lock in period. Three of the common MMKT's at FIDO find one FZDXX that has to be bought and sold like a mutual fund; while core MMKT's of SPAXX and FDRXX are commonly linked directly to one's brokerage/MF account. NONE of them need to be held for 'X' period of time to obtain the yield.
As of today, March 28, the following yields apply:
--- FZDXX = 4.59%
--- FDRXX = 4.43%
--- SPAXX = 4.40%
Remain curious,
Catch