【perfume mary kay thinking of love】Wall Street Week Ahead: Bond investors look for Fed to justify steepening yield curve
By David Randall
NEW YORK (Reuters) - Expectations that the global economy has dodged the worst-case scenarios for the coronavirus pandemic have led to a dramatic selloff in U.S. government bonds from their record highs,perfume mary kay thinking of love pushing the yield curve to its steepest level since March.
Investors will get a chance next week to see whether the U.S. Federal Reserve agrees with their optimism. The U.S. central bank is expected to hold a two-day meeting that will conclude Wednesday, the first since a meeting in April in which Fed Chair Jerome Powell said that the U.S. economy could feel the weight of the economic shutdown for more than a year.
While the Fed could introduce additional bond-buying programs known as quantitative easing or yield-curve control measures to target short-term rates, some fund managers say they expect that yields would need to rise significantly from here to justify any intervention in the bulk of the curve. Instead, they are watching for hints that the central bank believes the worst part of the coronavirus crisis has passed.
"They are really in this transition phase," said Eric Stein, co-director of global income and portfolio manager at Eaton Vance. "Markets are functioning, if not all the way back to pre-shock levels, with very strong debt issuance and market improvement, even though the real economy is incredibly weak."
As a result, Stein is looking for signs the Fed believes the economic rebound can support the rise in yields.
"The Fed will be okay with a slow creep higher, particularly with a backdrop of a recovery, but if it moves too much and destabilizes the recovery, there's a reason for concern," he said.
Ed Al-Hussainy, senior interest rate analyst at Columbia Threadneedle, expects the Fed to focus on its newly announced Main Street Lending Program, meant to support small- and medium-sized businesses facing financial strain because of the pandemic, as opposed to introducing significant new stimulus measures.
"The Fed is likely to communicate that there is more scope for fiscal measures but that is a very uncomfortable spot to be in," he said. "We won't have a clear sense of direction of the economy until well into the fourth quarter because all the sequential data now is massively positive."
The manufacturing ISM index rose to 43.1 in May from 41.5 in April, while weekly jobless claims fell to 1.877 million from 2.126 million the week before.
"Recent economic reports in the U.S. have been uniformly weak, though not any worse than expected," said Kevin Cummins,senior U.S. economist at NatWest Markets.
Story continues
Eddy Vataru, lead portfolio manager at Osterweis Capital Management, said the larger risk for the Fed is that rates remain too low, making it unlikely that there will be a significant push for yield curve-control measures.
"We can now discredit the worst outcomes of the virus. The sentiment around the risks around the virus have really changed," he said, pointing to declining infection and fatality rates in coronavirus hot spots such as the New York City region.
As a result, he is moving into corporate debt and mortgage-backed securities and shying away from Treasuries, which he said have "no investment value" at their current yields.
"At the end of the day, we have a ton of stimulus, both fiscal and monetary, and the markets have reacted to it," he said.
(This story has been refiled to correct time element in paragraph 2.)
(Reporting by David Randall; Editing by Bernadette Baum)
View comments
相关文章
- STROUDSBURG, PA/ ACCESSWIRE / June 2, 2020 /ESSA Bank & Trust announced today that it has transition2024-09-29
States' Settlement With Career Education Corp. Wipes Out $494M in Student Debt
Pile of Cash.Pile of cash. Photo: Romariolen/Shutterstock.comAn investigation led by eight states, i2024-09-29- For Immediate ReleaseChicago, IL – May 02, 2014 – Zacks.com announces the list of stocks featured in2024-09-29
Need To Know: Sanchez Energy Corporation (NYSE:SN) Insiders Have Been Selling Shares
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip si2024-09-29Morgan Stanley Deboards From Cruise Lines, Bearish On Carnival, Norwegian And Royal Caribbean
The shares of a number of cruise liners have been hit due to the coronavirus pandemic that's continu2024-09-29Pompeo says cooperation with Israel over Syria and Iran to continue
(Adds U.S. State Department spokesman)By Mary MillikenBRASILIA, Jan 1 (Reuters) - U.S. Secretary of2024-09-29
最新评论