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High Yield Bonds

Jul 21 2021

Tactical Junk

  • Jul 21, 2021

High yield bonds returned a robust 15.4% in the year ending June 30, extending a winning streak that produced a 56.4% cumulative return since the end of 2015.  After a quick, severe drawdown at the height of the COVID-19 scare, junk bonds have experienced nearly ideal market conditions, heralding a return to trends that have been in place for several years. The post-pandemic move toward this record low has been a boon to high yield bond investors, but it has also created a significant risk of reversal.  We believe most things in the financial markets are defined by cycles, with Treasury yields and credit spreads no exception.  Tight readings for both rate series demand that we consider the possibility that a cyclical reversal could weigh on junk bond prices going forward.

Jul 07 2021

Research Preview: High Yield’s Heyday

  • Jul 7, 2021

High yield corporate bonds returned over +15% for the twelve months ended June 30th, building on a strong five-year run that was interrupted by a short, but painful, drop at the onset of COVID-19. Chart 1 indicates that high yield bonds compound at a remarkably steady rate, with infrequent but severe drawdowns during times of financial stress.

May 06 2016

An Alarming 2008 Analogy?

  • May 6, 2016

While breadth and leadership accompanying the upswing off February lows have been impressive, the most outstanding feature of this advance might be the confirmation provided by high yield bonds.

Apr 07 2016

U.S. High Yield Corporate Bonds: Maintain Neutral

  • Apr 7, 2016

We will be looking for a good follow-through to consider an upgrade of these bonds.

Oct 07 2015

Stock Market Observations

  • Oct 7, 2015

The August market break did not emerge from out of the blue. The foundation for the bear case was put in place many months before those four ugly days in late August.

Oct 06 2014

U.S. Bonds

  • Oct 6, 2014

U.S. Quality Corporate Bonds & Munis Rated Favorable; High Yield Bonds Rated Neutral.

Sep 08 2014

US Bonds

  • Sep 8, 2014

U.S. Quality Corporate Bonds & Munis Rated Favorable; High Yield Bonds Upgraded To Neutral

Jul 08 2013

U.S. High Yield Corporate Bonds: Maintain Neutral

  • Jul 8, 2013

Although the fundamental picture remains healthy for most U.S. High Yield issuers and defaults are expected to be low, the reversal of a crowded trade could lead to further substantial losses on these bonds.

Jun 06 2013

U.S. High Yield Corporate Bonds: Maintain Neutral

  • Jun 6, 2013

High yield bonds are not immune to the tapering of QE.

Oct 03 2007

Rising High Yield Spreads....Implications For An Agnostic Stock Market

  • Oct 3, 2007

Link between Junk bonds and stock market seems to be indicating that stock investors are ignoring factors pushing Junk bond yields higher.

Aug 05 2003

Bond Market Summary

  • Aug 5, 2003

High Yield bonds rated marginally attractive after continued spread narrowing.

May 05 2003

Bond Market Summary

  • May 5, 2003

Is the Fed ready to buy Ten Year Treasuries, if necessary to stimulate the economy? This could certainly lead to another housing/refi boom, but will it be the catalyst to boost business spending/borrowing? We think not.

Mar 05 2003

High Yield Bond Opportunity: Yield Spreads Widen, Opportunity Remains

  • Mar 5, 2003

We believe High Yield bonds remain attractive. The economy is improving and corporate profits are rebounding from depressed levels.

Feb 05 2003

Bond Market Summary

  • Feb 5, 2003

The spread between Long Quality Corporates and twenty year Treasury bonds at the pinnacle is back down to a more normal range, as the Treasury shortage elimination-thesis has fallen apart due to rising budget deficits.

Dec 04 2002

Bond Market Summary

  • Dec 4, 2002

High Yield bond only fixed income area strongly appealing to us, currently.

Nov 05 2002

Bond Market Summary

  • Nov 5, 2002

We believe it is an opportune time to add to High Yield positions. The economy is improving and corporate profits are rebounding from depressed levels.

Jun 05 2002

Bond Market Summary

  • Jun 5, 2002

Expect CPI and PPI to both edge higher in second half of year...could be negative surprise, but not the start of something big.

Jan 04 2001

Bond Market Summary

  • Jan 4, 2001

U.S economy weakening faster than expected: Global economy also slowing. Increasing odds of a hard landing in 2001.

Dec 05 2000

Bond Market Summary

  • Dec 5, 2000

Overall inflationary pressures subsiding, but expect some energy related flair-ups.

Nov 04 2000

View From The North Country

  • Nov 4, 2000

“What? You’re buying Junk Bonds?!” Although some may view this as a high-risk, contrarian bet, the logic behind the strategy is explained.

Nov 04 2000

Bond Market Summary

  • Nov 4, 2000

U.S. economy losing momentum, global economy slowing more…..Increasing odds of recession in 2001, as banks tighten credit, energy costs remain high, and technology falters.

Feb 03 1999

January Mutual Fund Flows

  • Feb 3, 1999

Net inflows into U.S. focus equity funds were somewhat ahead of last year’s pace by the end of January. Estimated net inflows of $18 billion compares to last January’s $16.1 billion.

Feb 03 1999

Bond Market Summary

  • Feb 3, 1999

1998 Inflation Projections: CPI expected to end 1999 about unchanged from year end 1998 levels (year over year change of 0.0%).

Nov 04 1998

Bond Market Summary

  • Nov 4, 1998

At current levels U.S. T-bonds are no longer viewed as attractive. U.S. T-bond potential downside now about matches upside potential. Our 17 year old 5% T-bond target was achieved last month.

Feb 04 1998

January Mutual Fund Flows

  • Feb 4, 1998

Net inflows into equity funds lagged somewhat behind last January. We estimate U.S. focus equity funds experienced still strong net inflows of $17 billion, but foreign focus net inflows may have been less than $1 billion (net redemptions in the first few weeks).


Oct 01 1989

A Potential Tactical Move Into Junk Bonds

  • Oct 1, 1989

It still appears to be premature, but we are giving serious consideration to adding a package of selected high yield corporate bonds to the fixed income component of the two asset allocation models.