-
Welcome to the TSP Talk Forums forums.
You are currently viewing our boards as a guest which gives you limited access to view most discussions and access our other features. By joining our free community you will have access to post topics, communicate privately with other members (PM), respond to polls, upload content, join our AutoTracker, and access many other special features. Registration is simple and absolutely free so please, join our community today!
If you have any problems with the registration process or your account login, please contact us. -
Please read our AutoTracker policy on the IFT deadline and remaining active. Thanks!
-
$ - Premium Service Content (Info) | AutoTracker Monthly Winners | Is Gmail et al, Blocking Our emails?
Find us on: Facebook & X | Posting Copyrighted Material
-
-
Join the TSP Talk AutoTracker: How to Get Started | Login | Main AutoTracker Page
-
The Forum works well on MOBILE devices without an app: Just go to: https://forum.tsptalk.com ...
Or you can now use TapaTalk again!
F Fund
- Thread starter The_Technician
- Start date
The_Technician
Active member
Looks like the F fund is prime for a move tomorrow....Robo, u may have made a good move today, unlike the unfortunate move the herd made yesterday.
Good luck with it!
Good luck with it!
SkyPilot
Well-known member
Looks like the F fund is prime for a move tomorrow....Robo, u may have made a good move today, unlike the unfortunate move the herd made yesterday.
Good luck with it!
This would be the same unfortunate herd that is up over 25% YTD? :nuts:
FUTURESTRADER
Active member
lol...Dumbledore
Article on Bloombergnews today:
Bondholders Hoisted by Petards as Corporate Sales Depress Debt
By Caroline Salas
Sept. 18 (Bloomberg) -- During the summer of subprime discontent, bondholders refused to purchase the debt of the most creditworthy borrowers unless they could be compensated with extraordinary yields. The companies are returning the favor with the proviso: Be careful what you wish for.
U.S. corporations have sold about $144 billion of bonds since the start of August, luring buyers with above-market yields that promised as much as $400 million in added annual interest, according to data compiled by Bloomberg. CSX Corp., the third-largest U.S. railroad, home-improvement retailer Lowe's Cos. and computer-services company International Business Machines Corp. issued debt with yield premiums of about 30 basis points higher than their existing securities.
Now, investors complain that the concessions are driving down prices of bonds they already own. Jacksonville, Florida- based CSX's $300 million of 5.6 percent notes due in 2017 tumbled 2 cents on the dollar after the railroad sold $1 billion of debentures at a bigger premium on Sept. 4. Lowe's and IBM debt also fell after they sold new bonds.
``How much longer are you going to put up with that?'' asked James Lyman, who helps oversee $37 billion of fixed-income assets in New York at Fischer Francis Trees & Watts, a unit of Paris-based BNP Paribas SA, France's biggest bank.
The biggest part of the CSX sale consisted of $600 million of 6.25 percent notes due in 2018 that were priced to yield 175 basis points more than Treasuries of similar maturity. That caused the premium, or spread, on the railroad's 5.6 percent securities to widen by 26 basis points to 158 basis points, Bloomberg data show. A basis point is 0.01 percentage point.
Record Sales
Offering higher yields enabled companies to sell a record $92 billion of investment-grade debt in August, after they raised less than $40 billion in July, the lowest in more than two years, data compiled by Bloomberg show. This month's $50 billion is 16 percent ahead of the September 2006 pace.
By contrast, high-yield, high-risk issuers have been shut out of the market. More than 45 companies were forced to cancel, delay, or postpone debt offerings in June and July because of speculation that losses in mortgages to people with poor credit would slow the economy, data compiled by Bloomberg show.
Sales of junk bonds total $1.93 billion since July, compared with this year's weekly average of $3.3 billion. Junk bonds are rated below Baa3 by Moody's Investors Service and BBB- by Standard & Poor's.
Wider Spreads
As companies raised yield premiums on new debt, investment- grade corporate bond spreads widened to an average of 158 basis points, the most since 2003, from 86 basis points in February, according to indexes compiled by New York-based Merrill Lynch & Co., the third-largest securities firm by market value.
``New issues are drastically repricing the secondary market, and will continue to do so,'' said Matt Hastings, who helps oversee $13 billion in taxable fixed-income assets at Charles Schwab & Co. in San Francisco.
CSX and Lowe's are among at least 10 companies that sold bonds in the past month at yields at least 30 basis points more than their existing debt or similarly rated securities, Bloomberg data show. Investors would receive as much as $400 million in extra interest every year on debt that has been sold since July, based on that premium.
CSX's sale was split between the $600 million of 6.25 percent notes and $400 million of 5.75 percent debt maturing in 2013 priced at a spread of 155 basis points. The risk premium on the company's existing debt due in 2013 has risen to 167 basis points from 137 basis points the day before the sale. The company has the lowest investment-grade ratings from Moody's and S&P.
Ripple Effect
``We have a regular need to be in the capital market,'' Michael Ward, chief executive officer of CSX, said in an interview after the sale. ``We want to be able to be in there in good times and bad times.''
The offering had a ripple effect on other railroad bonds, Fischer Francis's Lyman said. Spreads on Fort Worth, Texas-based Burlington Northern Sante Fe Corp.'s $650 million of 5.65 percent notes due in 2017 have widened about 17 basis points since CSX's sale, according to Trace.
``These things look attractive when they come, but when everything else you own gets pushed wider it's frustrating,'' said Thomas Houghton, who manages $2 billion of corporate bonds at Advantus Capital Management in Minneapolis.
Lower Yields
Though spreads are wider, overall borrowing costs have fallen since June. That's because Treasuries have rallied, pushing yields lower, on speculation the Federal Reserve will cut interest rates as soon as today to prevent the worst housing slump in 16 years from driving the economy into recession.
``Issuers are generally recognizing that the increasing costs from spreads relative to Treasuries is offset by the rally in Treasury yields, so their all-in coupon costs look pretty good,'' said James Merli, global head of debt syndicate at Lehman Brothers Holdings Inc. in New York, the seventh-biggest underwriter of investment-grade debt.
The average investment-grade corporate bond yields 5.96 percent, down from this year's high of 6.19 percent in June, Merrill Lynch index data show. Yields move inversely to bond prices.
Companies had no need to sell bonds at premiums to lure buyers in the first half of the year. They borrowed at the fastest pace ever as risk premiums fell as low as 86 basis points, below the average of 132 basis points since the end of 1999. U.S. companies raised $714 billion in bonds through June, Bloomberg data show.
Turnabout
When Mooresville, North Carolina-based Lowe's sold $550 million of 5.4 percent notes due in 2016 on Oct. 3, the debt was priced to yield 2 basis points more than where its $500 million of 5 percent securities maturing in 2015 traded that day.
Lowe's, the second-largest U.S. home-improvement retailer after Atlanta-based Home Depot Inc., tapped the market again on Sept. 6, raising $1.3 billion by issuing bonds in three parts.
As part of the sale, Lowe's borrowed $250 million in 6.1 percent notes due in 2017 at a spread of 160 basis points and $500 million of 6.65 percent bonds due in 2037 that were priced to yield 188 basis points more than Treasuries.
Spreads on the company's 5.4 percent notes increased 25 basis points to 144 basis points on the day of the sale, and the premium on its $450 million of 5.8 percent bonds maturing in 2036 widened 32 basis points to 197 basis points, Bloomberg data show. Chris Ahearn, a spokeswoman for Lowe's, declined to comment.
IBM's Biggest Bond
IBM sold $3 billion of 5.7 percent notes due in 2017 on Sept. 11 in its biggest bond offering ever. The Armonk, New York-based company paid a spread of 139 basis points to Treasuries, 32 basis points more than where IBM's $600 million of 5.875 percent bonds due in 2032 were priced a day earlier, according to Bloomberg data.
The 2032 bonds tumbled 3 cents to 97.4 cents on the dollar and the spread widened to 140 basis points the day of the sale, Trace data show. Ian Colley, spokesman for IBM, declined to make Jesse Greene, the company's treasurer, available to comment.
``We're very hesitant to buy anything on the new issue front right now given expectations for further issuance'' and wider yield spreads, said Advantus's Houghton. ``If you're a buy-and-hold insurance company or pension fund, you're getting some pretty attractive levels.''
To contact the reporter on this story: Caroline Salas in New York at csalas1@bloomberg.net
Last Updated: September 18, 2007 00:07 EDT
Bondholders Hoisted by Petards as Corporate Sales Depress Debt
By Caroline Salas
Sept. 18 (Bloomberg) -- During the summer of subprime discontent, bondholders refused to purchase the debt of the most creditworthy borrowers unless they could be compensated with extraordinary yields. The companies are returning the favor with the proviso: Be careful what you wish for.
U.S. corporations have sold about $144 billion of bonds since the start of August, luring buyers with above-market yields that promised as much as $400 million in added annual interest, according to data compiled by Bloomberg. CSX Corp., the third-largest U.S. railroad, home-improvement retailer Lowe's Cos. and computer-services company International Business Machines Corp. issued debt with yield premiums of about 30 basis points higher than their existing securities.
Now, investors complain that the concessions are driving down prices of bonds they already own. Jacksonville, Florida- based CSX's $300 million of 5.6 percent notes due in 2017 tumbled 2 cents on the dollar after the railroad sold $1 billion of debentures at a bigger premium on Sept. 4. Lowe's and IBM debt also fell after they sold new bonds.
``How much longer are you going to put up with that?'' asked James Lyman, who helps oversee $37 billion of fixed-income assets in New York at Fischer Francis Trees & Watts, a unit of Paris-based BNP Paribas SA, France's biggest bank.
The biggest part of the CSX sale consisted of $600 million of 6.25 percent notes due in 2018 that were priced to yield 175 basis points more than Treasuries of similar maturity. That caused the premium, or spread, on the railroad's 5.6 percent securities to widen by 26 basis points to 158 basis points, Bloomberg data show. A basis point is 0.01 percentage point.
Record Sales
Offering higher yields enabled companies to sell a record $92 billion of investment-grade debt in August, after they raised less than $40 billion in July, the lowest in more than two years, data compiled by Bloomberg show. This month's $50 billion is 16 percent ahead of the September 2006 pace.
By contrast, high-yield, high-risk issuers have been shut out of the market. More than 45 companies were forced to cancel, delay, or postpone debt offerings in June and July because of speculation that losses in mortgages to people with poor credit would slow the economy, data compiled by Bloomberg show.
Sales of junk bonds total $1.93 billion since July, compared with this year's weekly average of $3.3 billion. Junk bonds are rated below Baa3 by Moody's Investors Service and BBB- by Standard & Poor's.
Wider Spreads
As companies raised yield premiums on new debt, investment- grade corporate bond spreads widened to an average of 158 basis points, the most since 2003, from 86 basis points in February, according to indexes compiled by New York-based Merrill Lynch & Co., the third-largest securities firm by market value.
``New issues are drastically repricing the secondary market, and will continue to do so,'' said Matt Hastings, who helps oversee $13 billion in taxable fixed-income assets at Charles Schwab & Co. in San Francisco.
CSX and Lowe's are among at least 10 companies that sold bonds in the past month at yields at least 30 basis points more than their existing debt or similarly rated securities, Bloomberg data show. Investors would receive as much as $400 million in extra interest every year on debt that has been sold since July, based on that premium.
CSX's sale was split between the $600 million of 6.25 percent notes and $400 million of 5.75 percent debt maturing in 2013 priced at a spread of 155 basis points. The risk premium on the company's existing debt due in 2013 has risen to 167 basis points from 137 basis points the day before the sale. The company has the lowest investment-grade ratings from Moody's and S&P.
Ripple Effect
``We have a regular need to be in the capital market,'' Michael Ward, chief executive officer of CSX, said in an interview after the sale. ``We want to be able to be in there in good times and bad times.''
The offering had a ripple effect on other railroad bonds, Fischer Francis's Lyman said. Spreads on Fort Worth, Texas-based Burlington Northern Sante Fe Corp.'s $650 million of 5.65 percent notes due in 2017 have widened about 17 basis points since CSX's sale, according to Trace.
``These things look attractive when they come, but when everything else you own gets pushed wider it's frustrating,'' said Thomas Houghton, who manages $2 billion of corporate bonds at Advantus Capital Management in Minneapolis.
Lower Yields
Though spreads are wider, overall borrowing costs have fallen since June. That's because Treasuries have rallied, pushing yields lower, on speculation the Federal Reserve will cut interest rates as soon as today to prevent the worst housing slump in 16 years from driving the economy into recession.
``Issuers are generally recognizing that the increasing costs from spreads relative to Treasuries is offset by the rally in Treasury yields, so their all-in coupon costs look pretty good,'' said James Merli, global head of debt syndicate at Lehman Brothers Holdings Inc. in New York, the seventh-biggest underwriter of investment-grade debt.
The average investment-grade corporate bond yields 5.96 percent, down from this year's high of 6.19 percent in June, Merrill Lynch index data show. Yields move inversely to bond prices.
Companies had no need to sell bonds at premiums to lure buyers in the first half of the year. They borrowed at the fastest pace ever as risk premiums fell as low as 86 basis points, below the average of 132 basis points since the end of 1999. U.S. companies raised $714 billion in bonds through June, Bloomberg data show.
Turnabout
When Mooresville, North Carolina-based Lowe's sold $550 million of 5.4 percent notes due in 2016 on Oct. 3, the debt was priced to yield 2 basis points more than where its $500 million of 5 percent securities maturing in 2015 traded that day.
Lowe's, the second-largest U.S. home-improvement retailer after Atlanta-based Home Depot Inc., tapped the market again on Sept. 6, raising $1.3 billion by issuing bonds in three parts.
As part of the sale, Lowe's borrowed $250 million in 6.1 percent notes due in 2017 at a spread of 160 basis points and $500 million of 6.65 percent bonds due in 2037 that were priced to yield 188 basis points more than Treasuries.
Spreads on the company's 5.4 percent notes increased 25 basis points to 144 basis points on the day of the sale, and the premium on its $450 million of 5.8 percent bonds maturing in 2036 widened 32 basis points to 197 basis points, Bloomberg data show. Chris Ahearn, a spokeswoman for Lowe's, declined to comment.
IBM's Biggest Bond
IBM sold $3 billion of 5.7 percent notes due in 2017 on Sept. 11 in its biggest bond offering ever. The Armonk, New York-based company paid a spread of 139 basis points to Treasuries, 32 basis points more than where IBM's $600 million of 5.875 percent bonds due in 2032 were priced a day earlier, according to Bloomberg data.
The 2032 bonds tumbled 3 cents to 97.4 cents on the dollar and the spread widened to 140 basis points the day of the sale, Trace data show. Ian Colley, spokesman for IBM, declined to make Jesse Greene, the company's treasurer, available to comment.
``We're very hesitant to buy anything on the new issue front right now given expectations for further issuance'' and wider yield spreads, said Advantus's Houghton. ``If you're a buy-and-hold insurance company or pension fund, you're getting some pretty attractive levels.''
To contact the reporter on this story: Caroline Salas in New York at csalas1@bloomberg.net
Last Updated: September 18, 2007 00:07 EDT
BeaverState
Member
Greenspan said on 60 Minutes he did his job when he mislead the American people.
weatherweenie
Well-known member
Yield on the ten year ^TNX is going up.
Last edited:
yeah, it shot up on the Fed announcement, but so did the AGG. What the...?
James48843
Well-known member
So why is the "F" suffering so much?
I thought the drop in interest rates would raise the yield, and bounce our "F" upward, not the opposite.
Am I wrong? Does a drop in rates also make our F fund go down?
I thought the drop in interest rates would raise the yield, and bounce our "F" upward, not the opposite.
Am I wrong? Does a drop in rates also make our F fund go down?
I believe you're correct.
http://en.wikipedia.org/wiki/Yield_curve
http://en.wikipedia.org/wiki/Yield_curve
inflation worries
The bond market was rallying into the Fed and we are seeing a little "sell the news" here. Also, those who took the flight to quality route are now selling bonds and buying stocks.
vectorman
Active member
Something to watch. Breakout coming. Direction??? Tomorrow is ' no news Friday', the VIX is testing 20 so if it goes up the markets will go down tomorrow, AGG may get a pop from that action, but inflation is the word of the day for bonds.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX
Symmetrical Triangle: A sideways chart pattern between two converging trendlines in which the upper trendline is declining and the lower trendline is rising. This pattern represents an even balance between buyers and sellers, although the prior trend is usually resumed. The breakout through either trendline signals the direction of the price trend.
View attachment 2147
http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=AGG&time=8 Look at the MACD, possible bearish roll-over.
http://stockcharts.com/school/doku.php?id=chart_school:glossary_s#symmetricaltriangle
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=VIX
Symmetrical Triangle: A sideways chart pattern between two converging trendlines in which the upper trendline is declining and the lower trendline is rising. This pattern represents an even balance between buyers and sellers, although the prior trend is usually resumed. The breakout through either trendline signals the direction of the price trend.
View attachment 2147
http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=AGG&time=8 Look at the MACD, possible bearish roll-over.
http://stockcharts.com/school/doku.php?id=chart_school:glossary_s#symmetricaltriangle
Last edited:
vectorman
Active member
I just saw Griffins post about new SPX highs. If the VIX stays below 20 and starts trending down then the market will like that and it will grind higher. This may cause more selling in bonds thus a breakout to the downside from the triangle above. I'll be looking for a retest of around 99.
http://www.tsptalk.com/mb/showpost.php?p=117461&postcount=787
http://www.tsptalk.com/mb/showpost.php?p=117461&postcount=787
Frixxxx
Moderator
I'm really getting tired of getting beat up when I park in the F fund.
I said that in April, I think you might be rewarded tomorrow and next week. I'm in F tomorrow on the ebb-run. I think the no-news Friday will cause a sell-off before mediochre to low earning reports next week.
SCHAGAN
Member
19 Sep-$11.59
Today's Estimate-$11.52
Difference-($0.07)
Makes getting that penny tomorrow in G really exciting...not.
Aspiration
Member
I'll echo the bitterness on getting beat up in the F fund as the market declines.
