Category: Corporate Bonds
The analysis published under this category are as follows.
Saturday, April 29, 2023
Corporate Bonds: "The Next Shoe to Drop" / Interest-Rates / Corporate Bonds
By: EWI
"The neckline has been broken over the last few days"
A "calamity" is likely ahead for corporate bonds, says our head of global research, Murray Gunn.
Some of Murray's analysis involves the head and shoulders, a classic technical chart pattern. In case you're unfamiliar with it, here's an illustration along with an explanation from one of our past publications:
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Tuesday, August 04, 2020
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs / Interest-Rates / Corporate Bonds
By: EWI
Default rates of low-grade corporate debt are risingThe demand for junk bonds is running high among global investors -- again.
As the Wall Street Journal noted on June 9:
Europe's riskiest corporate debt has rallied to pre-crisis levels.
Elliott Wave International's July Global Market Perspective, a monthly publication which covers 40-plus market worldwide, showed this chart and said:
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Wednesday, September 25, 2019
Ford Falls Off a Cliff—These 3 Companies Could Be Next / Companies / Corporate Bonds
By: Robert_Ross
It’s been a long time coming.
PIMCO, the world’s largest bond hedge fund, has been warning investors about this for months. So has Federal Reserve Chairman Jay Powell.
So I wasn’t surprised when the first domino in the corporate debt crisis fell last week…
Credit rating agency Moody’s downgraded Ford Motor Co.’s bonds from investment grade to “junk” status last Monday.
The downgrade affected Ford’s entire $84-billion debt load, according to Bloomberg.
Saturday, August 10, 2019
US Corporate Debt Is at Risk of a Flash Crash / Interest-Rates / Corporate Bonds
By: John_Mauldin
The world is awash in debt.
While some countries are more indebted than others, very few are in good shape.
The entire world is roughly 225% leveraged to its economic output. Emerging markets are a bit less and advanced economies a little more.
But regardless, everyone’s “real” debt is likely much bigger, since the official totals miss a lot of unfunded liabilities and other obligations.
Debt is an asset owned by the lender. It has a price, which—like anything else—can go up or down. The main variable is the lender’s confidence in repayment, which is always uncertain.
Wednesday, June 19, 2019
Most Income Investors Are Picking Up Nickels in Front of a Steamroller / Interest-Rates / Corporate Bonds
By: Jared_Dillian
Income investing is hard.
Let’s say you buy 20 bonds. Each of them yields 5%. Nineteen out of 20 mature at par and you get your money back, with interest.
One of them defaults. You are back where you started!
It is said that income investing is a negative art. Your goal isn’t to pick the winners—it’s to avoid the losers. You want to pick winners, invest in stocks. Have you seen a chart of Beyond Meat? Bonds generally don’t do that.
It is also said that income investing is like picking up nickels in front of a steamroller. You’re earning a 4–5% coupon, and you could get whacked pretty much any day, just like what happened at Toys “R” Us. It is a bit like selling puts.
Monday, February 18, 2019
The Corporate Debt Bubble Is Strikingly Similar to the Subprime Mortgage Bubble / Interest-Rates / Corporate Bonds
By: John_Mauldin
By Robert Ross : “Housing prices in the US never go down.”
Just about everyone in America believed that in the mid-2000s.
A limited amount of buildable land and a growing population would keep housing demand strong.
So, house prices will continue to rise.
That was the thinking, anyway.
Even some of America’s brightest minds—like former Federal Reserve Chairman Alan Greenspan—jumped on the stable housing bandwagon.
Monday, January 07, 2019
Half of Investment-Grade Bonds Are Just One Step from Junk Status / Interest-Rates / Corporate Bonds
By: Submissions
BY ROBERT ROSS :
The S&P fell 10%. It was its worst December since 1931.When the market drops, conventional investing wisdom says buy bonds. And this is what investors did.
Many have shifted money out of stocks into bonds. Much of that money has flowed into investment-grade corporate bonds.
These bonds are seen as some of the safest bonds investors can buy. The problem is that investment grade doesn’t mean what it used to.
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Wednesday, June 01, 2016
The $6 TRILLION Corporate Debt Implosion Begins... / Interest-Rates / Corporate Bonds
By: Graham_Summers
The corporate bond market is a $6 trillion time bomb waiting to go off.
It took the US half a century to grow its corporate bond market to $3 trillion.
Thanks to the Fed implementing ZIRP and holding rates there for seven years, we’ve doubled the corporate bond market, adding another $3 trillion in corporate debt… since 2009.
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Friday, March 18, 2016
Junk Bonds... Here we go again! / Interest-Rates / Corporate Bonds
By: Anthony_Cherniawski
MUT is making all-time new highs as this rally sucks in more gullible investors into junk bonds. As I have said before, MUT is the “cream of the crop.” Investors in this index have fared better than in most junk bond funds.
The sad part about this is that MUT is on a similar Cycle pattern as SPX. In other words, it may be about to join SPX in a panic Cycle decline next week.
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Friday, January 15, 2016
The Bond Bubble Has Begun Bursting / Interest-Rates / Corporate Bonds
By: Graham_Summers
The bursting of the bond bubble has begun.
As I’ve outlined previously the primary concern for Central Banks is the bond bubble. CNBC and other financial media focus on stocks because the asset class is more volatile and so makes for better content, but the foundation of the financial system is bonds. And bonds are THE focus for Central Banks.
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Monday, January 11, 2016
Junk Rhymes with Subprime / Interest-Rates / Corporate Bonds
By: Michael_Pento
On December 16th 2008, in what Ben Bernanke averred took a tremendous amount of "moral courage", the Federal Reserve officially arrived at its Zero Interest Rate Policy. ZIRP was a huge win for borrowers because it drove down the carrying cost of debt to historic lows. Unfortunately, savers didn't fare as well.
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Saturday, January 02, 2016
A 'Witch's Brew' Bubbling in Bond Market ETFs / Interest-Rates / Corporate Bonds
By: Gordon_T_Long
We believe the Credit Cycle has turned and with it will come some massive unexpected shocks. One of these will be the fall out in the Bond Market, centered around the dramatic growth explosion in Bond ETFs coupled with the post financial crisis regulatory changes that effectively removed banks from making markets in corporate bonds. It is a 'Witch's Brew' with a flattening yield curve bringing it to a boil.
Saturday, December 12, 2015
Soaring Bond Yields - This Is How Fast It Happens / Interest-Rates / Corporate Bonds
By: Raul_I_Meijer
For a while there, companies deemed to be highly risky were nonetheless able to borrow money for less than 6%. And borrow they did. Frackers, ultra-high-leverage retail chains and various other close-to-the-edge entities slurped up trillions from yield-starved investors who had forgotten about the other side of the risk/return equation.
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Friday, March 06, 2015
U.S. Corporate Bond Market Building Stress / Interest-Rates / Corporate Bonds
By: EWI
Editor's note: This article is excerpted from "The State of the Global Markets 2015 Edition," a comprehensive report by Elliott Wave International, the world's largest independent market-forecasting firm. For a limited time, you can download the full report, for free, and use its year-in-preview insights to prepare, survive and prosper through the global investment landscape of 2015 and beyond. Download the full, 53-page report here -- it's free.
Wednesday, October 01, 2014
Using Put Options to Bet on a Junk-Bond Crash / Interest-Rates / Corporate Bonds
By: Submissions
Rick Ackerman writes: Here’s an easy play for those who have never cashed a winning ticket trading put or call options. Specifically, I am going to tell you how to bet on a junk-bond crash without risking your shirt — even if junk bonds continue to defy gravity indefinitely. First, let me assert that straight-up directional plays with stock options almost never win. Your odds are better trying to predict precisely when a shooting star will flash across the night sky. Similarly, if you buy call options with the expectation that a stock is about to surge, your timing had better be perfect, since the options you’ll be buying will be priced to discount any such event. Indeed, to make money on the calls, the move in the underlying vehicle would need to be so steep as to lie well outside the stock’s historical behavior. Moreover, as implied above, you would need to initiate the trade just before the rally takes off, since, if you get in early, time decay will sap the value of your calls quickly. And you can forget about getting aboard after the rally has begun, since option prices will be goosed into the stratosphere mere minutes after the stock lurches higher.
Thursday, September 11, 2014
Floating-Rate Funds Poised to Profit as Interest Rates Rise / Interest-Rates / Corporate Bonds
By: Casey_Research
By Andrey Dashkov
Money can’t be this cheap forever. In other words, one of the most likely scenarios the US economy faces is rising interest rates. The current low-interest-rate climate is simply unsustainable. At some point—as it always does—the trend will turn around. We want to be prepared for that turn, and the right floating-rate fund can help.
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Tuesday, May 06, 2014
How to Find Junk Bonds That Don’t Stink / Interest-Rates / Corporate Bonds
By: Casey_Research
By Andrey Dashkov, Research Analyst
Riddle me this: Why would anyone ever buy junk bonds or a junk bond fund? Before we get to the answer, I would like to point something out that seems to be a given, but that astonishingly few investors think about: bonds are debt instruments, so investing in bonds means investing in debt, governmental or corporate.
Wednesday, December 04, 2013
How to Get Higher Interest Rates on Safer Bonds / Interest-Rates / Corporate Bonds
By: Investment_U
Steve McDonald writes: The bond market is a difficult place to earn a livable income during times of very low interest rates. The only way to earn a decent yield is to take risks on lower-quality bonds or to accept much longer maturity curves than good sense dictates.
But if you know where to look, there’s a virtually unknown feature in some bonds that can significantly increase your current income and beat the biggest threat to your money in the current bond market, while offering the increased level of safety that bonds are known for.
Monday, May 13, 2013
Hedge Funds Are Pouring Into Distressed Debt / Interest-Rates / Corporate Bonds
By: Money_Morning
Greg Madison writes: Regulators have demanded that banks stop engaging in so much risky behavior - chiefly, distressed debt investing. And the banks have begun to curtail this type of investing.
But this has led to an unprecedented - though not unpredictable - situation: It seems the hedge funds are picking up the slack.
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Thursday, May 02, 2013
How to Profit From the Apple (AAPL) iBond Announcement / Companies / Corporate Bonds
By: Investment_U
David Fessler writes: There was big news from Apple this week. And investors are eager to uncover exactly what it means and… most important… how to play the situation. The strategy is simple.
On the latest Apple (Nasdaq: AAPL) earnings call, Tim Cook announced that the existing share buyback program would be increased to $60 billion from the original $10 billion. The company has ample cash flow to support the increase, but Apple chose a different route. It’s diving into the debt market.
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