The Federal Reserve's emergency coronavirus programs have unleashed the possible dangers of moral hazard in financial markets once again. Former NY Fed President William Dudley explained the situation to Bloomberg. Alister Bull reports: Federal Reserve support for U.S. corporate debt, designed to preserve market functioning during the coronavirus pandemic, could have the unintended consequence of encouraging more risky behavior, said former New York Federal Reserve Bank President William Dudley. “People who have high-yield debt that’s outstanding, a lot of times that’s happened by choice,” … [Read more...]
Mortgage Delinquencies Soar
Shockingly, but unsurprisingly, mortgage delinquencies soared last month. Worst hit were lodging and retail loans. Joe Rennison writes for the Financial Times: The percentage of commercial property loans left unpaid by borrowers in the US more than trebled last month, in a sign of a deepening crisis in the $1.3tn market for bonds backed by the mortgages. The delinquency rate on loans underpinning commercial mortgage-backed securities rose from 2.3 per cent in April to 7.4 per cent in May, according to the data service Trepp. Borrowers are considered delinquent when they fail to make a … [Read more...]
Corporate Bond Yields: What You Can Earn Today
Corporate bonds are a good place to pick up yield in the bond market. With yields on government bonds in much of Europe and Japan in negative territory, corporate bonds offer a higher-yielding alternative. Corporate bonds are a broad universe, though. There are investment-grade corporate bonds, junk bonds, foreign corporate bonds, hybrid corporate bonds, and floating-rate corporate bonds among other variations. Investment-grade corporate bonds are the largest part of the corporate bond market. How Much Do Corporate Bonds Yield Today? We break the investment-grade corporate bond … [Read more...]
Is Remote Working About to Set Off a Flight to the Suburbs?
Laura Forman reports in The Wall Street Journal: The rise of remote working could empower renters in places like New York City and San Francisco to finally buy homes—just not necessarily in those cities. That could be good news for major online real-estate companies such as Zillow ZG +0.47% and Redfin RDFN -0.47% once the market thaws out. Transactions have plummeted globally as a result of the coronavirus pandemic. Global real-estate tech strategist Mike DelPrete says short-lived transaction declines of as much as 90% have been observed in cities in China, South Korea and Italy at the … [Read more...]
Junk Bond Yields
What do junk bonds yield today? The table below lists the yield of the Merrill Lynch junk bond index (High-Yield index), as well as the latest SEC yield on some of the top junk bond (high-yield) dedicated funds. A note of caution when you are looking at yields on junk bond funds; Like all SEC yields, these yields are based on the last 30-days of income generated by the fund. They are not directly comparable to the yields on the Merrill Lynch junk bond indices. Junk Bond DescriptionSymbol Yield 4.30.20 Yield 5.31.20Merrill Lynch U.S. High-Yield Indexn.a.8.06%7.10%Vanguard … [Read more...]
Ginnie Mae (GNMA) Bond Yields
What do Ginnie Mae (GNMA) bonds yield? The table below lists the yields on two of the major Ginnie Mae (GNMA) indices as well as the latest SEC yield on some of the top Ginnie Mae (GNMA) dedicated funds. A note of caution when you are looking at yields on Ginnie Mae funds. Like all SEC yields, these yields are based on the last 30-days of income generated by the fund. They are not directly comparable to the yields on the Merrill Lynch and Barclay’s Ginnie Mae (GNMA) indices. Description Symbol Yield as of 4/30/2020 Yield as of 5/31/2020 Merrill Lynch Ginnie Mae … [Read more...]
The Highest Yielding S&P 500 Stocks
If you are on the hunt for yield, the top 10 highest yielding S&P 500 stocks is a tempting place to look for new ideas. Compared to the less than 2.5% yield offered by investing in an S&P 500 index fund, the average yield of the highest 10 dividend-paying S&P 500 stocks is over 8.3%. The list below includes the 10 highest yielding S&P 500 stocks along with their indicated dividend yield. Click the company name for more information on each stock. Highest Yielding S&P 500 Stocks Company NameYieldSimon Property (SPG)11.53%CenturyLink (CTL)9.43%Oneok Inc. … [Read more...]
The Highest Yielding Dow Stocks
For investors looking for high-yielding dividend stocks to buy, the highest dividend payers in the Dow Jones Industrial Average (DJIA) is a common starting point. Below is a list of the 10 highest yielding Dow stocks. Today, the average yield of the 10 highest-yielding Dow Jones Industrial Averages stocks is 4.74%. You can see their individual yields in the table below. Click the company name for more information on each stock. To view the entire list of Dow stocks ranked by yield, click here. Highest Yielding Dow Jones Industrial Average Stocks Company NameDividend … [Read more...]
How will the U.S. Repay $30 Trillion in Debt?
With Congress considering yet another stimulus bill with the price tag measured in trillions, Victor Davis Hanson offers a sobering reminder of what comes next. The deficit is expected to exceed $4 trillion soon and the national debt may climb to $30 trillion or nearly $100,000 for every American. How will the United States sustain this level of debt, let alone repay it? VDH offers five ugly choices. Inflation looks like the most expedient option for the political class. Negative Interest Rates One, Americans would be forced to live with permanent near-zero interest rates, or … [Read more...]
Don’t Follow Europe into Banning Bank Dividends
At The Financial Times, Greg Baer makes the case against banning bank dividends. He writes: Leaving aside its putative benefits, a blanket dividend ban imposed outside the current regulatory framework would come with a substantial cost. It would make it difficult for investors to value banks, and thereby make them decidedly less investable. Investors might logically prefer companies whose boards of directors retain authority to maximise value for shareholders, so long as all regulatory requirements are met. This would continue a worrisome trend. The market value of US banks, relative to … [Read more...]
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