Macro Monitor
Bond Market Summary
The bond market remains in our buying zone. We expect the summer lows to hold, and very soon a sharp upward move in bond prices. The cyclical bull market target zone is 9% yields for T-Bonds in the next 12-18 months. Maybe much lower on a secular basis.
View from the North Country
A new set of risk-reward tables has been designed, exclusively for Zero Bonds. These tables will be part of a November Special Research Study, coming out under separate cover. But one of the timelier tables is previewed here.
Bond Market Summary
The bond market has backed off this last month and there is a remote chance it might even retest the lows. But it looks to me like the lows have already been made and the cyclical bond bull market is back on the track.
Bond Market Summary
The bond market is in the midst of both secular and cyclical bull moves. The cyclical bull market target zone is 9% yields for T-Bonds in the next 12-18 months. Maybe much lower on a secular basis. The recent correction carried to our 12% T-Bond buying zone and we loaded up again.
“Zero” Bonds Vs. Stocks…A Long, Long-term Perspective
A 12% annual compound growth rate can be locked in through the purchase of Treasury “Zeros.” Over 23 years this is a government guaranteed 1250%+ total return. In this extended research piece, risk is evaluated and the mechanics of creating and buying Zero bonds are discussed. Frankly, we were astounded by the results of this study.
Bond Market Summary
The bond market is in the midst of both secular and cyclical bull moves. The cyclical bull market target zone is 9% yields for T-Bonds in the next 12-18 months, maybe much lower on a secular basis. The current correction has carried to our buying zone and we are continuing last month’s new buy program in long T-Bonds.
Bond Market Summary
July and early August were quite unpleasant. T-bonds led the parade on the downside with yields rising over 100 basis points since our last issue. Damage in the quality corporate sector was not quite so severe, and the lower quality junk bonds only lost a few points.
Bond Market Summary
The bond market is in the midst of both secular and cyclical bull moves. The cyclical bull market target zone is 9% yields for T-bonds, maybe much lower on a secular basis. The current correction might run to 12%-12.5% for T-bonds, but we are tempted to start a buying program before that.
Bond Market Summary
In recent weeks the municipal market has been relatively weak compared to other fixed income markets. Long municipal yields are now 89% of long T-bonds, back up to about the levels where we recommended our unorthodox move in early February. It looks like a great opportunity.
Bond Market Summary
The bond market is also in the midst of secular and cyclical bull moves and the six-month consolidation may be over. If T-Bonds clearly exceed November 1982 peaks, assume the cyclical bull market is back on track with a cyclical target zone of 8.5% yields...lower on a secular basis.
What Happens to the Stock Market When Inflation is Accelerating or Decelerating?
An update of our historic research tracking all years of significant inflation acceleration and deceleration since 1900. If inflation does rise to 6% by year end 1983, the stock market outlook is not so bright.
Bond Market Summary
The bond market is also in the midst of secular and cyclical bull moves. But intermediate-term is now a question mark. However, if bonds exceed November 1982 peaks, assume cyclical bull market back on track. Go with the flow.
Opportunity in the Unlikely
Long-term municipals now extraordinarily cheap relative to other fixed income instruments. Strange as it may seem, Muni’s may even be relatively attractive for non-taxable portfolios.
Bond Market Summary
It would appear the bond market correction has further to go. In a few months we will probably recognize this as the first interest rate “hiccup” of the economic recovery.
Bond Market Summary
While it certainly does not appear the big bull market in bonds is over, it would not be surprising to see an additional five to eight-point correction from current levels.
Are Bonds Too Popular Now?
Dedicated portfolios, TIGR types, long-term bond buy and holders and bond traders soaking up the government financing like so many sponges. For long-term T-Bonds at least, the demand may be greater than the supply for a while, creating a premium situation. It’s hard to believe a T-Bond could become an investment rarity, but these are strange times.
U.S. 10-Year: Not All In Sync
· The higher-highs/higher-lows pattern since the 10-year yield trough in January is encouraging but the bigger test is the 225-230 area.
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