Yield

Uncategorized, Weekly Update

Investors Begin Worrying About an Inverted Yield Curve … and Recession


Published January 12, 2018

timingcube_cartoon011218

With the global economy firing on all cylinders it’s hard to believe investors would find anything to worry about. But they have. For years now investors have wondered when and how the era of near-zero interest rates would end. Are we now on the cusp of seeing how the backside of the Fed’s unprecedented monetary policy easing impacts markets? (more…)

Weekly Update

When Yield Spreads Get Crazy


Published August 11, 2017

timingcube_cartoon081117

Yield spreads provide a view into the risk appetite of market participants. If the spread between low risk and high risk bonds is large, investors are concerned and want to receive more compensation for taking on the added risk. As investors become more comfortable with the market and begin to view it as increasingly benign, they require less compensation. In times of extreme market complacency, the relationships between risk and return appear to almost break down. And so it is with European high yield (aka “junk”) bonds today. (more…)