fake yeild breakoutEarlier this week, we noted that “the Consensus Hates Bonds.” That is a small part of the reason my firm decided to increase our exposure to specific types of fixed income this year after having been significantly underweight bonds in 2013. I mentioned we added preferreds and corporate fixed income, obtaining that exposure primarily though exchange-traded funds.

That struck a chord with J.C. Parets, a chartered market technician. J.C. is founder of Eagle Bay Capital, LLC, and is the author of the blog All Star Charts.

 

Continues here

Category: Fixed Income/Interest Rates, Sentiment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “Nobody Likes Bonds!”

  1. LeftCoastIndependent says:

    Keep it short term to be safe.

  2. Willy2 says:

    My personal opinions:
    - Rates (TNX) bottomed in mid 2012 with the TNX at ~ 1.40%.
    - Rates (TYX) could go down/spike down again, down to ~ 2.5% or ~ 2% in the next ~ 2 to 3 months.
    - After that it’s “Game over’ for the 31 year (1981 – 2012) bull market in government bonds.
    - When the TNX goes up to 5% or higher then it’s “Game over” for the US government as well.
    (GOOGLE the words “Crunch time, Fred Mishkin, Federal Reserve”).
    - The relationship between junk bonds & treasuries seem to be reversing, following the reversal in the direction of the yield curve. This would confirm a reversal in investor confidence.

    • Willy2 says:

      “Consensus hates bonds” ??? The steepening yield curve tells me investors LOVED (high yield (??))bonds.

      • Willy2 says:

        Correction: The flattening (!!!) yield curve tells me investors LOVED – at least in the last months – (high yield (???)) bonds.

  3. Alex says:

    Any thoughts on the MREITs? They had a lousy 2013, not sure what would send them up, but the consensus must hate them rather passionately.

  4. Mr.-Vix-It says:

    I agree completely. I am heavily long bonds and the Yen. These are probably the two most hated trades in the markets right now which means I will likely win on these two trades. Every time the Fed has ended a program, bonds have rallied which is exactly what is happening again. 10 year is going back under 2% and USD/JPY is headed to under 100. You heard it here first…

  5. Willy2 says:

    Did one Mr. Ritholtz never look at (the ETFs) JNK, HYG & LQD ? And at the TLT vs. JNK ratio ?

    What do you mean “Concensus hates bonds” ???