Unlike emerging-market mutual funds, ETFs don’t have the option of holding cash, so if they get outflows, they have to sell the underlying bonds in the index they track.
In the week just passed, the bond market continued its bullish recovery, though with far less of the fundamental impetus that followed the prior week’s litany of economic disappointments.
We recently saw a “death cross” in the 200-day and 50-day moving averages. But despite the foreboding name, turbulence may be minimal.
The outperformance of bonds since the financial crisis, risk aversion and regulations unfriendly to equities have helped create a preference for fixed income.
Global policy makers like Yellen, Draghi and Kuroda should not rely on standard historical models like the Taylor Rule and Phillips Curve.
In the week just passed the bond market had a modest correction that, unlike it's bearish predecessor, strikes me as being as much about data and the Fed as oversold technicals and sentiment.
The best manager of bonds in America refuses to pay full price.
In the week just passed, the market enjoyed a brisk technical sell-off, abetted perhaps by a better balance of economic data than has been the case.
Analysts at Sanford C. Bernstein & Co. warn investors that the two-decade negative correlation between equities and debt is starting to unravel.
"Because the Fed has been talking about the taper for four years, people have heard enough about it."