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DATE

RESEARCH REPORT

27-Dec-10	Fixedated: Dec. 20 - 24, 2010 Treasury yields ended the holiday week slightly higher on fairly muted action and may have found a near-term trading range. High-yield corporates outperformed their investment-grade counterparts, while munis captured headlines as one analyst called for massive defaults over the next 12 months. We do not agree with the assessment.
20-Dec-10	Fixedated: Dec. 13 - 17, 2010 The Treasury selloff did not hold as a rally that started last Thursday left the 10-year Note basically unchanged week-over-week. The rally plays into our previously stated belief that continued volatility will breed opportunity. Word is starting to circulate now that the BABS program will be recreated in some form after the first of the year. We echo that sentiment.
13-Dec-10	Fixedated: Dec. 6 -10, 2010 Treasuries continued to slide last week as the 10-year ended at 3.32% -- its yield is up nearly 80 bps in just five weeks. The move is being driven partially by an increasingly positive economic outlook. However, we do not discount the idea that some investors are getting out before U.S. debt becomes "the" story. From our vantage point, volatility will be strong enough to warrant moving in and out of positions in the near term.
06-Dec-10	Fixedated: Nov. 29 - Dec. 3, 2010 Helped by a disappointing employment report, Treasuries rallied back sharply on Friday, but could not hold onto the gain. Corporates took a hit as well as the YTW on both high-yield and investment-grade bonds rose to levels not seen since August and September, respectively. Europe remains a bit of guessing game as every bailout simultaneously applies a patch for today while exposing the lack of a long-term solution and Germany's growing uneasiness with its role. Treasury auction demand metrics bear watching this week.
29-Nov-10	Fixedated: Nov. 22 - 26, 2010 Treasuries saw a wide trading range last week as yields were pushed higher by good economic data and weak auction results and pulled lower on European debt concerns. At this point, the safety trade may be the only thing supporting low Treasury yields. Corporates were weaker across the board. Munis managed to rally back a bit after the prior week's sell-off.
22-Nov-10	Fixedated: Nov. 15 - 19, 2010 The fact that Treasury yields did not push lower across the board last week amplifies how much less significant the safety trade -- as it relates to Treasuries -- has become even as Ireland and Portugal steal the headlines. Germany is flexing its muscle in the bailout talks, as we believe it should. The 10-year AAA muni broke through 3.00% -- it ran above 3.00% until early July when the 10-year Treasury was at 2.95% (close to its current level).
15-Nov-10	Fixedated: Nov. 8 - 12, 2010 Treasuries took a hit all along the curve last week as the market began to see the end of the road for QE2 support. However, the 30-year sale was not the Titanic-like situation it was made out to be. Corporates were weaker across the board, but high-yield has noticeably outperformed over the last two months. California will be out with a debt sale scheduled to reach nearly $14 bln. We expect good demand despite budget woes.
08-Nov-10	Fixedated: Nov. 1 - 5, 2010 Treasuries showed just how volatile they can be as participants struggled to define the risk factors currently in the market. The 30-year took the brunt of the selling and its upcoming auction could be interesting. Corporates continued to catch a bid as the investment-grade and high-grade indices we follow saw their yields head lower. The ML U.S. HY Mstr II Index is now just 27 bps away from its 10-year YTM low. European debt issues may be reaching another tipping point as Germany looks to mitigate future problems.
01-Nov-10	Fixedated: October 25 - October 29, 2010 Treasuries sold off last week on concerns that QE2 will not be as big as the market had hoped, but they recaptured about half of their losses by Friday. Corporates were mixed for most of the week, but closed out Friday basically unchanged. Munis gave up a bit of ground as the FactSet 10-year AAA yield broke through the 2.70% level for the first time since August 16. The big stories this week will be the elections and the "will he, won't he, and how big will the ring be" storyline of QE2 (FOMC meeting Wed).
25-Oct-10	Fixedated: October 18 - 22, 2010 Treasury yields have continued to hold at low levels even as equities have rallied and money has flowed into commodities. The message? All is well -- so long as the Fed releases QE2 next week to receptive audiences around the world.
18-Oct-10	Fixedated: October 11 - 15, 2010 Treasury yields pushed lower early in the week, but reversed course on generally good economic data and earnings reports. Corporates were mixed as high-yield debt continued to attract attention while investment-grade yields sold off with Treasuries. Munis were near their lows for the year as demand remained high for top deals.
11-Oct-10	Fixedated: October 4 - 8, 2010 Treasuries had another strong week on data that pointed to a sluggish economic recovery and the belief that another stimulus package is on the way. The 2- , 3- , 5- , and 7-year Notes all touched record lows. High-yield and investment-grade corporates both showed gains as well. The ML U.S. 7-10 Yr Corp A index hit an all-time low of 3.70% on Friday (12-31-96 inception). Munis trended sideways while demand for new paper remained strong last week. Treasury auctions, another round of QE, and Q3 earnings will be the focuses for the week.
04-Oct-10	Fixedated: September 27 - October 1, 2010 Treasuries could not hold onto their lowest levels of the week, but still ended on a positive note on mixed economic data. Investment-grade and high-yield corporates both gained last week as issuance -- and appetite -- remained high. The ML U.S. High Yield Mstr II Index yield reached yet another 52-week low while the ML U.S. Corp 7-10 Yr "A" Index is only 8 bps from its own 52-week low. Muni yields ended the week slightly higher and the 10-year FactSet AAA muni rose to 105.2% of the 10-year Treasury (2.65% vs. 2.52%, respectively).
27-Sep-10	Fixedated: September 20 - 24, 2010 Treasuries rallied last week as the 10-year reached a 2.48% before retreating to a 2.61% on Friday as equities ran higher on solid durable goods numbers and a general turn in sentiment. The Treasury will reenter the markets this week with three major auctions (2-, 5-, and 7-year Notes). Corporates were mixed. Investment-grade debt saw a nice rally while high-yield bonds basically treaded water. Munis trended back toward their low yields for the year as participants snapped up last week's new issues.
20-Sep-10	Fixedated: September 13 - 17, 2010 Though the trading range for the 10-year Note was about 20 bps for the week, Treasuries ended relatively unchanged. Decent economic data and a lack of sales kept things in check. With no major auctions on the agenda this week, news out of Europe and the FOMC meeting will drive the action. Corporates saw good gains for the week as the ML U.S. HY Master II Index YTW reached another 52-week low. Munis continued to grind sideways on moderate sales. This week may provide several larger new issues for participants to tackle.
13-Sep-10	Fixedated: September 7 - 10, 2010 Treasury yields rose sharply as the 10-year rose from a low last week of 2.56% to close at 2.79% -- its highest yield since hitting 2.82% on August 9. Corporates were mixed. High-yield bonds gained and investment-grade debt sold off with Treasuries. The ML U.S. HY Mstr II hit its lowest yield (8.05%) since April 30, 2010. Munis held their own again on slim supply over the holiday-shortened week.
07-Sep-10	Fixedated: August 30 - September 3, 2010 Treasuries were whipsawed last week as the 10-year Note and the 30-bond Bond traded within spreads of more than 29 bps and 36 bps, respectively. High-yield corporates rallied a bit while investment-grade company debt followed Treasuries and ended the week slightly off after moving through the 4.00% yield level earlier in the week. Munis were relatively unchanged on light supply.
30-Aug-10	Fixedated: August 23 - 27, 2010 Treasuries sold off hard last Friday after rallying to yields not seen since January 2009. The ML U.S. 7-10 Yr. Corp. A Index yield fell to 3.93% -- within 8 bps of its all-time low -- before ending the week at 4.09%. Muni yields continued to grind lower as demand outstripped light supply.
23-Aug-10	Fixedated: August 16 - 20, 2010 Yields, in general, continued to trend lower indicating concerns about a big equity sell-off and/or another freeze in the credit market IF, in fact, the bond market is correct. The 10-year Treasury made a push to 2.50% late last week while the 30-year briefly broke the 3.60% mark. The continued move lower in yields is concerning on a number of levels. One concern we think is underappreciated, though, is the interest rate risk. Corporate yields also headed lower as the ML 7-10 Yr Corp A Index pierced 4.00% for the first time since June 2003. Muni yields dropped again as investor demand outweighed supply.
16-Aug-10	Fixedated: August 9 - 13, 2010 Treasury yields moved substantially lower last week on weak economic data, deflation concerns, double-dip talks and the Fed's announcement that it would keep its balance sheet constant by using MBS proceeds to buy Treasuries. Corporates ended the week mixed as investment-grade bonds grinded lower and high-yield debt continued to give up ground. Johnson & Johnson's issued debt at record low yields last week. However, the real story was the spread at which the deal got done. When JNJ issued 10-year debt in June 2008, it did so at a spread of 103 bps. This deal came at +43 and traded down to +15 for block size on Friday. The FactSet 10-year muni index has dropped 28 bps in six weeks and is once again over 100% as a percentage of Treasuries as participants have snapped up the limited high-grade supply.
09-Aug-10	Fixedated: August 2 - 6 , 2010 Treasuries rallied hard on Friday's poor employment report after meandering sideways for most of the week. Renewed talk about additional quantitative easing, as well as the specter of disinflation (or deflation), helped to support a move to lower yields. Corporate debt issuance continues to be strong as companies take advantage of low yields and high demand to strengthen their balance sheets. As investment-grade corporate yields head lower, we have become increasingly focused on dividends as an income play. Separately, munis mostly treaded water on low new issuance. We continue to see relative value in BABS when compared to corporate debt.
02-Aug-10	Fixedated: July 26 - 30, 2010 Demand at last week's Treasury auctions was a bit sporadic -- average 2-year, great 5-year, and a weak 7-year. While Q2 corporate earnings continue to be strong, the Treasury market does not seem to agree that everything else is coming up roses. Both high-yield and investment-grade corporates rallied for the week. The ML 7-10 Yr "A" Corp Index hit its lowest yield since July 1, 2003. Income investors should note there are attractive dividend yields available from a variety of companies including Merck (MRK), DuPont (DD) and ConocoPhillips (COP) to name a few. Munis hit a roadblock as the FactSet 10-year AAA Index stalled at 2.86% all last week -- a level it first reached on July 21. BABS continue to offer some value as 10-year AAA Columbus came at 3.89% vs. 10-year Microsoft (MSFT) and Johnson & Johnson (JNJ) at 3.10%.
26-Jul-10	Fix-ated: July 19 - 23, 2010 Treasuries sold off into the end of last week as the risk trade picked up a bit on solid earnings reports and the European banking sector's not-so-stressful test that contained no surprises. Other high-grade investments continued to do well as the MMA AAA 10-year Muni Index hit its lowest level in over nine years and the ML 7-10 Yr "A" Corp Index reached its lowest yield since March 19, 2004. We believe there are some attractive dividend yields available now.
19-Jul-10	Fix-ated: July 12 - 16, 2010 Treasuries, high-yield and investment-grade corporates, and municipal bond yields all rallied last week as equities ended the week lower. Municipals have seen significant gains over the past month. The 10-year FactSet AAA has moved 32 bps lower. The ML "A" 7-10-year Corporate Index and the ML U.S. HY Mstr II Index have moved 59 and 63 bps lower respectively. We continue to believe that "second-tier," investment-grade corporates -- like GE (GE), Kraft (KFT), Verizon (VZ) -- offer the best value. Goldman Sachs' (GS) 5-and-10-year bonds are now trading back to pre-indictment levels, but still offer some relative value. There has been talk that European sovereign debt fears are calming, but we do not believe that the recent auctions by Spain, Portugal, and Greece, or the action in U.S. Treasuries, supports that idea.
12-Jul-10	Fix-ated: July 5 - 9, 2010 Treasury yields finally softened a bit as the 10-year rose nearly 10 bps last week in reaction to the stock market's rally. Corporate bond investors shifted favor to the high-yield sector as the ML HY Mst II Index rallied from a 9.07% to a 8.85% yield for the week. The 10-year AAA muni finally broke through the 3.00% barrier and closed the week out at 2.94%. Q2 earnings and Treasury auctions should drive the action this week.
06-Jul-10	Fix-ated: June 28 - July 2, 2010 With the 10-year Treasury yield back to its April 2009 level, we are starting to wonder if there really was a recovery. With muni and high-grade corporate yields moving lower, selective high-grade debt is looking attractive again. We believe it is prudent for investors to start to consider the ramifications of what the possible fixes to the European debt crisis might look like and how they may impact the market.
28-Jun-10	Fix-ated: June 21-25, 2010 Treasury yields moved lower last week even as the auction results were mixed. We believe there is more risk than reward in Treasuries at this point. The FactSet AAA 10-year Muni ended the week at over 100% as a percentage of Treasuries (3.14% vs. 3.11%), but that speaks more to the power of risk aversion than it does to the cheapness of munis. We recommend staying selective in corporates as the ML HY Mstr II Index has regained 51 bps since June 10.
21-Jun-10	Fix-ated: June 14-18, 2010 Treasuries finished last week where they began as yields were contained by lackluster economic data and ongoing eurozone fears. The ML HY Mst II Index yield has moved down 46 bps since June 11 -- the biggest one-week move since September 2009 -- and is now back to late-May levels. The 10-year AAA still failed to break through the top of its 3.09%-3.20% range that it has been in since April 27. With regards to BP, we would hold, but not add to, bond positions.
14-Jun-10	Fixated: June 7-11, 2010 Treasuries traded in a wide range last week, but ended basically flat. All three auctions saw average demand as low yields tempered the safety trade. Corporates were weaker as the ML HY Mstr II Index reach its highest yield (9.40%) since April 27. We reiterate our stance that we would not add to, or initiate, positions in BP or RIG -- but we would not be sellers either. The best relative values right now may be in state-backed municipal debt.
07-Jun-10	Fix-ated: June 1-4, 2010 Treasuries rallied into the weekend on a poor payrolls reports and a new concern in Europe (Hungary). The 10-year yield went below 3.20% last Friday after breaking the 3.40% level on Thursday. Investment-grade corporates performed well while investors continued to approach high-yield debt with caution. BP and RIG bonds continued to get battered. We would hold their respective debt, but remain cautious about adding to or initiating positions as the liability picture is still cloudy.
02-Jun-10	Bond Investors Drill BP and Transocean Overall, the pressure on shelf drilling is supportive of our investment theme: "Commodities -- A Structural Imbalance." While widened bond spreads look bad, they have been exaggerated by the 10-year Treasury yield moving lower. At the same time, the risk of a BP dividend cut is limited in our view. We would hold BP and RIG debt here, but would not add to positions.
01-Jun-10	Fix-ated: May 24-28, 2010 Treasuries made a run at the 3.00% level early last week before settling back to the 3.25%-3.30% range as the weekend approached. We continue to believe there is more downside risk than upside potential in Treasuries. High-yield corporates may have finally levelled off. The ML High-Yield Mstr II Index went from 7.96% on April 28, to 9.33% on May 26, before settling at 9.07% to end the week. Refinancing risk could become an issue for some companies should high-yield rates resume their march higher.
24-May-10	Fix-ated: May 17-21, 2010 Treasury yields ran lower last week as the flight-to-safety trade took hold. However, pushing interest rate risk aside right now could prove to be painful later. Investment-grade corporates continued to perform well, but as spreads get more and more compressed, opportunities are getting scarce. Top-tier companies yielding 3.80% - 3.90% (PEP, IBM, PFE) might look good at +60 to +70 to Treasuries, but we would note that the 10-year Treasury stood at 3.99% a mere six weeks ago. The back-up in high-yield rates may be a buying opportunity.
18-May-10	Corporate Bonds -- Earnings Review: 18 May 2010 A brief look at some individual debt issues of companies that reported earnings today, how they compare to Treasuries, and how we view their valuations. Today's companies include HD, HPQ and WMT. HPQ and WMT look pricey while HD still offers some value on the short end of the curve.
17-May-10	Fix-ated: May 10-14, 2010 Treasuries once again benefited from eurozone concerns and the 30-year auction saw very strong "dollar demand." Investment-grade and high-yield corporate bonds performed well.
14-May-10	A Look at the Relative Value of Goldman Sachs' 10-year Notes Goldman Sachs' (GS) debt has cheapened substantially since the SEC announced its investigation on April 16th, 2010. While there may be short-term pricing challenges, GS's bonds currently stand out as solid relative value options.
10-May-10	Fix-ated: 3-7 May, 2010 Treasuries rallied on eurozone concerns late last week, but have weakened early today on news of the new-and-improved EU/IMF bailout package. Investment grade corporates and municipals held up well while high-yield bonds saw a fairly large sell-off.
03-May-10	Fix-ated: 26-30, April 2010 Treasury auctions went reasonably well last week. Investment grade corporates outperformed high yield during the week.
29-Apr-10	Corporate Bonds -- Earnings Review: 29 April 2010 A brief look at some individual debt issues of companies that reported earnings Thursday, how they compare to Treasuries, and how we view their valuations. Today's companies include BG, BMY, CAH, COP, FO, IP, K, MET, MOT, PG and WMI.
28-Apr-10	Corporate Bonds -- Earnings Review: 28 April 2010 A brief look at some individual debt issues of companies that reported earnings Thursday, how they compare to Treasuries, and how we view their valuations. Today's companies include ALL, DOW, ESRX and WLP.
27-Apr-10	Corporate Bonds -- Earnings Review: 27 April 2010 A brief look at some individual debt issues of companies that reported earnings today, how they compare to Treasuries, and how we view their valuations. Today's companies include DD, F, SWK, UPS, X and VLO.
27-Apr-10	Treasury Auction Preview: 27 April 2010 The U.S. Treasury will sell $44 bln 2-year Notes later today (1:00 p.m. ET). We expect solid demand as the safety trade is alive and well on eurozone issues.
26-Apr-10	Corporate Bonds -- Earnings Review: 26 April 2010 A brief look at some individual debt issues of companies that reported earnings today, how they compare to Treasuries, and how we view their valuations. Today's companies include CAT and WHR.
26-Apr-10	Treasury Auction Preview: 26 April 2010 The Treasury will kick off a series of longer maturity auctions when it sells $11 bln 5-year TIPS later today (1:00 p.m. ET).
26-Apr-10	Fix-ated: 19-23 April, 2010 Treasuries ended the week fairly flat after rallying on concerns over Greece. High-yield corporates continued to perform well. The Treasury's auctions and corporate earnings will be the focus this week.
22-Apr-10	Corporate Bonds -- Earnings Review: 22 April 2010 A brief look at some individual debt issues of companies that reported earnings today, how they compare to Treasuries, and how we view their valuations. Today's companies include AXP, BAX, HSY, MAR, PEP, PM and VZ.
21-Apr-10	Corporate Bonds -- Earnings Review: 21 April 2010 A brief look at some individual debt issues of companies that reported earnings today, how they compare to Treasuries, and how we view their valuations. Today's companies include ABT, MO, AMGN, T, BA, MS, SBUX and UTX.
20-Apr-10	Corporate Bonds -- Earnings Review: 20 April 2010 A brief look at some individual debt issues of companies that reported earnings today, how they compare to Treasuries, and how we view their valuations. Today's companies include GS, JNJ, KO and UNH.
19-Apr-10	Corporate Bonds -- Earnings Review: 19 April 2010 A brief look at some individual debt issues of companies that reported earnings today, how they compare to Treasuries, and how we view their valuations. Today's companies include C, HAL, IBM and LLY.
19-Apr-10	Fix-ated: April 12-16, 2010 Treasuries benefited from the safety trade late last week on news from Goldman Sachs (GS) and Greece. Corporate bonds continued to perform well across the board.
12-Apr-10	Fix-ated: April 5-9, 2010 Treasuries regained lost ground on the back of three solid auctions, high-yield corporates rallied and munis showed some weakness heading towards April 15th.
05-Apr-10	Fix-ated: March 29 - April 2, 2010 Treasuries were off slightly last week and face an uphill battle this week in the face of looming supply. Municipals were slightly weaker -- again on very little issuance. This week's calendar looks to be light as well.
05-Apr-10	Are Treasuries at a Tipping Point? "Dollar demand" has been a favorite measurement of ours recently -- and that is what has us a bit concerned right now. Although the numbers from two weeks ago were still strong relative to the first half of the 12-auction cycle, it is notable that all three auctions were significantly below the recent trend. For now, we would say Treasuries are a "buyer beware" proposition.
29-Mar-10	Fix-ated: March 22-26, 2010 Treasuries yields rose sharply last week as all three major auctions failed to impress the market. Municipals also made their first major move to the downside since early February while corporates displayed relative strength.
25-Mar-10	Treasury Auction Preview: 25 March 2010 The Treasury will wrap up its major auctions for the week later today when it sells $32 bln 7-year Notes. Demand has been tepid so far this week and we think it is likely that trend will continue today.
24-Mar-10	Treasury Auction Preview: 24 March 2010 The Treasury will hold the second of its major auctions later today when it sells $42 bln 5-year Notes. Supply concerns may keep demand lighter than the market would prefer to see.
22-Mar-10	Fix-ated: March 15-19, 2010 Treasuries remained strong last week as eurozone concerns continued to fester. Corporate issuance was strong and both high-yield and investment-grade bonds recorded gains.
18-Mar-10	Corporate Bonds -- Earnings Review: 18 March 2010 A brief look at some individual debt issues of companies that reported earnings today, how they compare to Treasuries, and how we view their valuations. Today's companies include FDX and NKE.
15-Mar-10	Fix-ated: March 8-12, 2010 Last week, all three major Treasury auctions were greeted with heavy demand, corporate issuance rose significantly, and two of the most headline-battered municipal credits saw market acceptance.
10-Mar-10	Treasury Auction Preview: 10 March 2010 The Treasury will hold the second of its major auctions later today when it sells $21 bln in 10-year Notes. Today's weakness in the market should help to bolster demand.
09-Mar-10	Treasury Auction Preview: 09 March 2010 The Treasury will kickoff its major auctions for the week with $40 bln of 3-year Notes later today (1:00 p.m. ET). We expect the solid demand trend to continue.
08-Mar-10	Fix-ated: March 1-5, 2010 U.S. Treasuries fell last week as the employment report came in better than expected. Corporate bonds were mixed as high-yield bonds rallied significantly and investment-grade bonds showed some weakness.
05-Mar-10	Corporate Bonds -- Earnings Review: March 1-5, 2010 A brief look at some individual debt issues of companies that reported earnings this week, how they compare to Treasuries, and how we view their valuations. This week's companies include DISH, AZO and SPLS. DISH stands out as a possible good play for managers who want to stay on the shorter end of the curve.
01-Mar-10	Fix-ated: Feb. 22-26, 2010 U.S. Treasuries rallied last week as the safety trade took center stage in light of the ongoing concerns in the eurozone and less-than-stellar economic data. The U.S. government once again benefited from the woes of others as all three of its auctions were well received. Corporate bonds were mixed as investment-grade bonds outdid high-yield bonds.
25-Feb-10	Treasury Auction Preview: 25 February 2010 The Treasury hopes to cap off a week of solid sales with today's $32 bln 7-year Note auction (1:00 p.m. ET). The 7-year has established a solid demand trend over the past several months and we see no reason for that to stop now given that the flight-to-safety trade is back on in full force.
24-Feb-10	Corporate Bonds -- Earnings Review: 24 February 2010 A brief look at some individual debt issues of companies that report earnings Wednesday, how they compare to Treasuries, and how we view their valuations. Today's companies include ESRX, RIG and TJX. ESRX's 5-year Note stands out as the most interesting.
24-Feb-10	Treasury Auction Preview: 24 February 2010 Today's $42 bln 5-year Note auction (1:00 p.m. ET) should find solid support in light of a strong 2-year Note auction Tuesday and economic data that continues to bring the strength and quickness of the recovery into question.
23-Feb-10	Corporate Bonds -- Earnings Review: 23 February 2010 A brief look at some individual debt issues of companies that reported earnings Tuesday, how they compare to Treasuries, and how we view their valuations. Today's companies include HD, M and TGT. HD continues to be worth considering on a relative-value basis.
23-Feb-10	Treasury Auction Preview: 23 February 2010 Today's $44 bln 2-year Note auction (1:00 p.m. ET) should find decent support in light of today's less-than-inspiring economic data. Fairly robust "dollar demand" should lead to a reasonably strong bid-to-cover.
22-Feb-10	Corporate Bonds -- Earnings Review: 22 February 2010 A brief look at some individual debt issues of companies that report earnings on Monday, how they compare to Treasuries, and how we view their valuations. Today's companies include CPB, LOW and JWN. While we think LOW is still a reasonable option, we feel there may be better alternatives to CPB and JWN -- especially in the 10-year range.
22-Feb-10	Fix-ated: Feb. 16-19, 2010 U.S Treasuries retreated toward their highest yields of the year last week. The safety trade seems to be weakening as the market starts to once again weigh the likelihood of interest rate increases and yet another week of heavy supply. Corporate bonds were mixed as high-yield debt rallied from its sell-off the week before.
17-Feb-10	Corporate Bonds -- Earnings Review: 17 February 2010 A brief look at some individual debt issues of companies that reported earnings Wednesday, how they compare to Treasuries, and how we view their valuations. Today's companies include DE and HPQ. While we think each of their shorter-maturity bonds are reasonable plays, we do point out some options for managers to consider.
16-Feb-10	Fix-ated: Feb. 8-12, 2010 U.S Treasuries survived another week of heavy issuance as eurozone concerns continued to support the safety trade. While the market's response to the auction results was less than enthusiastic, each sale did have solid "dollar demand." Corporate and municipal issuance were each muted, but there were still some large individual issues that were well received by the market. High-yield bonds continue to weaken as indicated by the fact that the ML HY index reached a level not seen since mid-December 2009.
16-Feb-10	Corporate Bonds -- Earnings Review: 16 February 2010 A brief look at some individual debt issues of companies that reported earnings Tuesday, how they compare to Treasuries, and how we view their valuations. Today's companies include KFT and MRK. We continue to believe that KFT has some upside in it.
11-Feb-10	Corporate Bonds -- Earnings Review: 11 February 2010 A brief look at some individual debt issues of companies that reported earnings Thrusday, how they compare to Treasuries, and how we view their valuations. Today's companies include MAR, PEP and PM. MAR still has some value left in it even after its recent run.
11-Feb-10	Treasury Auction Preview: 11 February 2010 Today's $16 bln 30-year Note auction (1:00 p.m. ET) should find decent support given the recent back-up in yields. The bid-to-cover might disappoint the market if the auction fails to attract less than $39 bln in "dollar demand" -- the amount needed to reach the 11-auction average of 2.44. That would be the highest "dollar demand" since we started tracking the figure in January 2009.
10-Feb-10	Treasury Auction Review: 10 February 2010 Today's $25 bln 10-year Note auction disappointed the market with regard to its bid-to-cover. However, "dollar demand" was still fairly significant.
10-Feb-10	Treasury Auction Preview: 10 February 2010 Today's $25 bln 10-year Note auction (1:00 p.m. ET) may have a disappointing bid-to-cover if the "dollar demand" does not significantly exceed recent levels.
09-Feb-10	Corporate Bonds -- Earnings Review: 09 February 2010 A brief look at some individual debt issues of companies that report earnings Tuesday, how they compare to Treasuries, and how we view their valuations. Today's companies include DIS and KO. Both appear to be fully valued.
09-Feb-10	Treasury Auction Preview: 09 February 2010 Today's $40 bln 3-year Note auction (1:00 p.m. ET) will likely see heavy "dollar demand."
08-Feb-10	Fix-ated: Feb. 1-5, 2010 The U.S. Treasury market solidified its safe-haven position as professional investors drove yields down while fleeing from riskier assets including sovereign debt and global equities. While options are becoming more limited, we believe that there are still select relative-value plays in corporate and taxable municipal bonds.
04-Feb-10	Corporate Bonds -- Earnings Review: 04 February 2010 A brief look at some individual debt issues of companies that reported earnings Thursday, how they compare to Treasuries, and how we view their valuations. Today's companies include AVP, BG, CI, CLX and K. BG stands apart from the pack.
03-Feb-10	Corporate Bonds -- Earnings Review: 03 February 2010 A brief look at some individual debt issues of companies that reported earnings Wednesday, how they compare to Treasuries, and how we view their valuations. Today's companies include BDK, CSCO, CMCSA, IP, PFE, and YUM. YUM and BDK may have had their runs.
02-Feb-10	Corporate Bonds -- Earnings Review: 02 February 2010 A brief look at some individual debt issues of companies that reported earnings Friday, how they compare to Treasuries, and how we view their valuations. Today's companies include ADM, DOW, HSY, PBG, UPS, and WHR. HSY and others look compelling while UPS looks full.
01-Feb-10	Fix-ated: Jan. 25-29, 2010 The flight-to-safety trade continued to reign supreme as investors looked to the U.S. as a safe haven in the wake of mounting fiscal issues in the eurozone and heightened concerns that China will take further steps to curtail its economic growth.
29-Jan-10	Corporate Bonds -- Earnings Review: 29 January 2010 A brief look at some individual debt issues of companies that reported earnings Friday, how they compare to Treasuries, and how we view their valuations. Today's companies include CVX, FO, HON, and NWL.
28-Jan-10	Corporate Bonds -- Earnings Review: 28 January 2010 A brief look at some individual debt issues of companies that reported earnings Thursday, how they compare to Treasuries, and how we view their valuations. Today's companies include MO, T, BAX, BMY, CAH, F, MOT, PG, and TWC.
28-Jan-10	Treasury Auction Preview: 28 January 2010 A look at today's $32 bln 7-year Note auction.
27-Jan-10	Company Snapshots: 27 January 2010 A brief look at some individual debt issues of companies that reported earnings Wednesday, how they compare to Treasuries, and how we view their valuations. Today's companies include ABT, BA, CAT, COP, HBI, UTX, VLO, and WLP.
27-Jan-10	Treasury Auction Preview: 27 January 2010 A look at today's $42 bln 5-year Note auction.
26-Jan-10	Company Snapshots: 26 January 2010 -- DD, GLW, JNJ, VZ, X A brief look at some individual debt issues of companies that reported earnings Tuesday, how they compare to Treasuries, and how we view their valuations.
26-Jan-10	Treasury Auction Preview: 26 January 2010 A look at today's $44 bln 2-year Note auction.
25-Jan-10	Fix-ated: Jan. 19-22, 2010 Flight-to-safety ruled the week.
25-Jan-10	Halliburton Snapshot: January 2010 Halliburton's 10-year note a good relative value.

27-Dec-11	Fixedated: December 19 - 23, 2011 Treasuries were not on the shopping lists of many participants last week as the long end of the curve saw a fairly dramatic selloff. Corporates were mixed for the week. HY bonds gained as the safety trade weakened. IG debt followed Treasuries to high yields. Munis were stable last week with very little new supply.
19-Dec-11	Fixedated: December 12 - 16, 2011 Treasuries benefited from a directionless Europe as the 10- and 30-year issues hit yields not seen since early October. Last week’s auctions saw demand levels near the highs of the year. IG corporates kept pace with the rally in Treasuries, dropping 16 bps. HY bonds lagged, moving just 1 bp lower. Munis gained a bit on the week, but lagged Treasuries, thereby increasing their relative value on a percentage-of basis.
12-Dec-11	Fixedated: December 5 - 9, 2011 Treasuries ended the week slightly weaker at the long end of the curve as hopes that Europe’s debt crisis can be contained continued to spring eternal. However, Europe’s leaders appear to be recycling sound bites that offer little in the way of credible solutions. Corporates ended the week slightly positive. The HY index has rallied 44 bps since touching 9.04% on November 25. The FactSet 10-year AAA Muni Index touched an all-time low of 2.38% last week. At 115% of the 10-year UST, the relative value argument is losing steam.
05-Dec-11	Fixedated: November 28 - December 2, 2011 Treasuries ended last week mostly on a down note as equities took control of the trading environment. The reaction was fairly strong given that not much has changed regarding the European debt crisis. Yes, the announcement that central banks will coordinate dollar funding as needed showed that leaders are thinking ahead about necessary backstops. However, the need for backstop implies that a failure is still possible. Corporates were positive for the week as the “risk on” equity trade pushed the HY index to a markedly lower yield. Munis were steady as the market digested a fair amount of new supply.
28-Nov-11	Fixedated: November 21 - 25, 2011 Treasuries were in high demand last week as concerns that Germany would follow France’s path to higher yields gripped the market. However, that sentiment was reversed over the weekend. The key for Treasuries is how sensitive they are to European headlines. The 10-year moved from a low of 1.88% on Wednesday to 2.08% this morning. Corporates took a step back as HY bonds broke through the 9.00% level for the first time since October 18. The FactSet 10-year AAA Muni Index closed the week at 133% of the 10-year UST.
21-Nov-11	Fixedated: Nov 14 - 18, 2011 Treasury yields fluctuated quite a bit, but closed the week in the black. Europe and the not-so “super committee” are helping to keep yields low. And with France now in Moody’s crosshairs, USTs will likely continue to catch the safety bid. Corporates saw minor loses last week, but the rise in yields was fairly mild. Munis continue to defy the gloom-and-doom predictions of the past year or so.
14-Nov-11	Fixedated: November 7 - 11, 2011 Treasuries traded in a fairly wide range last week as the Euro debt crisis once again gripped the market. Auction results were mixed. Tepid demand for the longer-maturity auctions may indicate that investors are not comfortable with current yields even with the situation in Europe being far from over. We expect more bumpy days to come. Corporate yields were higher across the board with HY taking the bigger hit. Munis were steady once again as several large deals got taken down with relative ease.
07-Nov-11	Fixedated: October 31 - November 4, 2011 Treasuries caught the safety-trade bid again as the situation in Greece and the rest of Europe became more convoluted than ever. Yields on the 10-year Treasury fell 28 bps last week to 2.04%. That was the lowest, ending-week yield since reaching 1.92% in the immediate aftermath of Operation Twist being announced in September. Corporates were mixed with investment grade gaining ground and high yield slipping a bit. Separately, munis rebounded some with participants receptive to an increase in new issuance.
31-Oct-11	Fixedated: October 24 - 28, 2011 Last week’s Treasury auctions went well, aside from a drop in foreign interest for the 7-year sale. The announcement that Europe’s leaders had yet another plan to corral the debt crisis spurred a sell-off in USTs, which was reversed when investors realized that the “plan” was more of a “maybe if we…” At this point, we think it is fair to say that the market is unimpressed. Corporates continue to do well as HY debt rallied another 58 bps last week. Munis lost a bit of ground, but still outperformed Treasuries.
24-Oct-11	Fixedated: October 17 - 21, 2011 Investors once again tuned into the dialogue coming from Europe last week as hopes ran high for a new turn in a tired script. Unfortunately, what they got were mostly repeats of As the Euro Turns. Treasury yields continue to benefit from the lack of action. Corporates did well last week. The advance in the ML U.S. HY Mstr II Index has been stunning as the widely followed benchmark’s yield has fallen 143 bps since October 4. Munis gained a bit as last week’s larger deals – including $2 bln California state GOs – were well received.
17-Oct-11	Fixedated: October 10 - 14, 2011 Treasuries lost ground on the week, undercut by modestly stronger economic data and the hope that the worst-case scenario for the European debt crisis is now essentially off the table. The Treasury auctions saw strong interest from primary dealers. Corporates were positive on the week as HY came roaring back, dropping 62 bps (and 97 bps since October 4). Munis were stable as the FactSet 10-year AAA Muni Index moved down just 1 bp. California is readying a $2 bln GO sale this week which we believe may offer a compelling relative value.
10-Oct-11	Fixedated: October 3 - 7, 2011 Treasury yields saw a big push higher last week on decent U.S. economic numbers and renewed hope that the European debt crisis will be contained. However, after almost a year of reassurances and promises, we are starting to think that European leaders might need refreshers on the meaning of the words "rescue" and "bailout." Corporates were under pressure as well as the HY index broke 10% for the first time in over two years before settling at 9.76%. The relative-value trade remains intact for munis as the FactSet 10-year AAA Muni Index stands at 132% of the 10-year UST.
03-Oct-11	Fixedated: September 26 - 30, 2011 Treasury yields pushed higher early in the week, but reversed course as mostly modest economic data put the safety trade back in vogue. While the U.S. economy may still be struggling to find firm footing, the Treasury market seems to be wearing anti-gravity boots. Corporate yields were up on the week. The IG index rose 17 bps; however, the HY index rose 51 bps, which pushed its spread to the 10-year UST to more than 750 bps for the first time since mid-September 2009. Munis continue to offer good relative value as the FactSet 10-yr AAA Muni Index stands at 132.8% of the 10-yr UST.
26-Sep-11	Fixedated: September 19 - 23, 2011 Treasury yields took a whole new step lower with the formal announcement of Operation Twist. Reports indicate that the G20 nations are pressing Europe's leaders to be more aggressive, that there may be a push to recapitalize European banks if necessary, and that the haircut participation rate for Greek debt is inching towards 90%. The inertia holding back European leaders from taking aggressive action will no longer do. Corporates were mixed for the week as the HY index rose 38 bps and hit 9.00% for the first time since July 2010 while the IG index was unchanged. The FactSet AAA 10-year Muni Index moved to 140% of Treasuries before settling at 132%.
19-Sep-11	Fixedated: September 12 - 16, 2011 Treasuries were slightly weaker last week, but the 10-year held around 2.00% on European debt concerns. Last week’s auctions saw mixed demand with the 30-year emerging as the big winner as some participants positioned themselves for the implementation of Operation Twist. If the Fed announces something else, buyers may have a problem. Corporates were mixed. The IG spread to the 10-year UST is at its widest in more than two years. Munis continued to move sideways. California will hold its first general obligation sale of the year. Friday’s preliminary 30-year yield was 4.80% – or a 6.67% tax-equivalent yield for the 28% tax bracket – more than double the yield on the 30-year UST.
12-Sep-11	Fixedated: September 6 - 9, 2011 Treasuries continued to run lower on the flight-to-safety trade. In Europe, the feeling seems to be that someone needs to bring out a bazooka to address the debt crisis. At this point, participants appear to be preparing for some type of a restructuring from Greece. Corporates were mixed on the week as HY suffered a bit from the market's overall aversion to risk while IG traded sideways. Muni yields pushed to new lows as the FactSet 10-year AAA Muni Index hit 2.50%. At 130% of the 10-year UST, crossover buyers can still find value.
06-Sep-11	Fixedated: August 29 - September 2, 2011 Over the holiday weekend, my 12 lb. dog and I were confronted by a rattlesnake. I had to decide, do I grab a broom handle or a shotgun? The answer? A shotgun. Let us hope President Obama and Congress feel the same way because the capital markets need someone to get out there and make some noise -- action and ammo. Corporates rallied last week. Some participants sought safety in IG bonds while others looked for extra yield in HY debt. Munis continued to edge lower. The FactSet AAA 10-year Muni Index now stands at 127% of the 10-year UST.
29-Aug-11	Fixedated: August 23 - 26, 2011 Treasuries ended on a down note last week, but were relatively stable as the 10-year traded in a range of about 20 bps. Considering the prior week saw a 30 bp range, and the week before that it was 50 bps, 20 bps is downright boring. Corporates were also weak and both the IG and HY spreads to Treasuries have been at levels not seen in quite some time. Munis ended the week a touch to the downside, but the FactSet AAA 10-year Muni Index is still registering levels in a range not seen in nearly a year.
22-Aug-11	Fixedated: August 15 - 19, 2011 Treasury yields were pushed lower as investors sought safety in a market where multiple uncertainties appeared to capture participants' angst all at once -- even if none were new developments. When uncertainty reigns, it is good to be the king. Safety, thy name is Treasuries. Despite the flight to Treasuries, IG and HY corporates advanced as risk aversion abated a bit. At 465 bps, the HY to IG spread is at a level not seen since late 2009 and is up 181 bps since July 25. Munis continued to garner interest as investors sought shelter in IG debt.
15-Aug-11	Fixedated: August 8 - 12, 2011 Treasuries kept the party rolling as yields hit or neared multi-year lows. While S&P might say that U.S. Treasuries are no longer the safest best, the market apparently feels otherwise. Scorecard: Treasuries 1, S&P 0. Corporates felt the risk-off effect last week as HY touched its highest YTW since July 2010 while IG followed Treasury yields lower and hit its lowest YTW since October 2010. Munis received a reprieve last week as S&P confirmed that some municipalities could keep their AAA rating despite the U.S. downgrade.
08-Aug-11	Fixedated: August 1 - 5, 2011 The once unthinkable became reality this weekend as S&P downgraded the long-term debt rating of the U.S. to AA+. While the long-term impact is unknown, we believe this downgrade amounts to getting fired from a job you planned on quitting: the ego might be bruised, but life has not changed that much. For now, we continue to believe that Europe's debt issues are the more pressing matter. Corporates moved in opposite directions as anything with risk was deemed an investmenta non grata. AAA munis rallied right along with Treasuries last week as investors piled into investment grade debt. S&P's downgrade of the U.S. could lead to ratings changes for AAA-rated states and local municipalities over the long term.
03-Aug-11	A Debt and Deficit Attention Disorder The near-term problem of raising the U.S. debt ceiling has been resolved. The real problems – burgeoning U.S. debt levels and lackluster economic growth – are far from solved, however. The war over these issues has barely begun. With U.S. debt remaining a focal point for the market and the economy, today’s report – which will act as a primer for future pieces – will provide a basic understanding of the current state of U.S. federal debt obligations and explain how the situation developed.
01-Aug-11	Fixedated: July 25 - 29, 2011 Treasuries rallied last week despite the inability of U.S. lawmakers to approve a debt ceiling increase. Ironically, Treasuries have become their own safety trade. The formula seems to be: Soft Economic Data + Eurozone Debt Issues + Printing Press > Default Possibility + Potential Downgrade. Corporates performed well as cash-rich companies could benefit from sovereign struggles. At 2.88%, 10-year AAA munis are now yielding more than 100% of the 10-year U.S. Treasury.
25-Jul-11	Fixedated: July 18 - 22, 2011 Treasury yields moved slightly higher as eurozone leaders increased fiscal support for Greece while U.S. lawmakers continued to debate the debt ceiling limit and a plan to reduce the deficit to no avail. The bigger picture for Treasuries though is that they could continue to show relative strength regardless of what happens. Corporates were mixed. HY outperformed IG as risky assets garnered more attention with near-term, doom-and-gloom scenarios evaporating. Munis kept a steady hand as a major issuance last week was well received.
18-Jul-11	Fixedated: July 11 - 15, 2011 Treasuries held their ground on eurozone debt concerns even as the debt ceiling debate deteriorated. According to the yield curve and the demand at last week's auctions, the market appears to be regarding an increase in the debt ceiling as a given. While an outright crisis will likely be averted with a stop-gap measure, we believe that view is shortsighted. Corporates were mixed as IG rallied and HY was slightly weaker. The 10-year FactSet AAA muni hit 100% of the 10-yr UST at times last week.
11-Jul-11	Fixedated: July 5 - 8, 2011 Treasuries spent much of the week looking for direction and finally got it on Friday from a disappointing payrolls report. Both IG and HY corporates gained ground. However, the spread between the two indices has fallen 34 bps since June 24 as HY has outperformed IG by a wide margin. Munis had another steady week.
05-Jul-11	Fixedated: June 27 - July 1, 2011 Treasuries saw the bull turn into a bear last week as yields moved higher across the board. However, the 10-year yield is still about 50 bps below its early Feb. peak. The catalyst was the lowered risk of a default from Greece -- at least for now. All the auctions saw weak demand. Corporates were mixed as HY showed a strong gain while IG followed the reverse in Treasuries. Munis were also down, but showed some relative strength as the FactSet 10-year AAA Muni Index rose just 11 bps this week.
27-Jun-11	Fixedated: June 20 - 24, 2011 Treasuries recorded further gains last week as concerns about a U.S. economic slowdown and worries that Greece's debt situation will be bungled kept a foot on risk's throat. With the 10-year UST at 2.86% versus a forward earnings yield of 8.14%, we like the long-term risk-reward for equities. Corporates wavered during the week, but ultimately ended with a small gain for IG and a small loss for HY. Munis are the market's "Even Steven" as the FactSet 10-year AAA Muni Index has held at 2.86% for the last 7 sessions.
20-Jun-11	Fixedated: July 13 - 17, 2011 Treasuries rallied on new fears that Greece might be having difficulty dealing with its debt issues. Wait. Did we say new? We mean renewed. And by renewed, we mean there was no real new information about the situation at all. The real problems are not being addressed. Greece will still have a misfiring economy, a full-on blame game, and lax tax collection. Everybody join in...Second verse, same as the first. The spread between HY and IG corporates topped 300 bps for the first time in 2011.
13-Jun-11	Fixedated: June 6 - 10, 2011 Treasuries kept the rally hat on as the 10-year yield pushed lower on U.S. economic growth concerns and hope that the Fed will continue to support the bond market in one form or another. Buyer beware. Corporates were mixed as IG treaded water while HY sold off. The spread between the HY index and the 10-year UST crossed 400 bps (currently 414 bps) for the first time since January 5 and the spread between HY and IG has risen 72 bps since April 8. The 10-year FactSet AAA Muni Index was unchanged for the week.
06-Jun-11	Fixedated: May 30 - June 3, 2011 For the first time since December 2010, the 10-yr Treasury yield fell below 3.00%. Weak U.S. economic data and a rush to safety following more evidence that Greece will need a larger bailout were the main causes for the decline. Corporates were mixed as IG again trended flat while HY rose on weak data. Muni yields tightened slightly as safety traders continued to move into state and local government debt.
31-May-11	Fixedated: May 23-27, 2011 Treasury yields headed south last week as increased concerns regarding the European debt crisis solution (or lack thereof) and weak U.S. economic data reinforced an already solid safety trade. Corporates were mixed as IG trended flat while HY showed a bit of weakness. Munis continued to stand firm as mass default concerns appear to have been put on the backburner by most participants.
23-May-11	Fixedated: May 16 - 20, 2011 Treasuries ended the week nearly unchanged, but continue to be a favored play as the market grapples with "he-said-she-said" economic and earnings data. So long as U.S. economic growth is questionable, inflation remains muted, and the European debt crisis outcome stays muddled, there is little reason for participants to sell. Last week's corporate news can be summed up in two words: new issues. Munis stayed on their treadmill theme of grinding lower on limited supply.
16-May-11	Fixedated: May 9 - 13, 2011 Treasuries are strong right now, but they are starting to resemble Charlie Sheen. "What debt ceiling? What deficit concern? Winning!" In all seriousness, the combination of tempered inflation expectations and relative safety appears to be a "winning" combination. At this point, there is no Ashton Kutcher to come to the rescue of investors. Corporates were mixed for the week as the HY Index YTW hit a fresh all-time low (6.68%). The FactSet AAA 10-year Muni Index is now at its lowest point since Nov. 14, 2010.
09-May-11	Fixedated: May 2 - 6, 2011 Treasury yields continued to push lower on concerns the recovery is slowing down, as well as the "normal" overseas issues. Times are good for bonds, but as oil and silver proved last week, fortunes can turn on a dime. The IG corporate index hit its lowest YTW (4.19%) since November 30 and its spread to HY hit its widest level since March 24 last Thursday. The FactSet AAA 10-Year Muni Index breached the 3.00% level (2.99%) for the first time since December 6 as the flight to quality continues to overtake meager supply.
02-May-11	Fixedated: April 25 - 29, 2011 Treasuries rallied as the 10-year yield reached its lowest level in over a month. With no major events spurring the move, it is hard to argue that the recent rally is based solely on the safety trade. Last week's auctions saw some of the worst demand in the past twelve months. HY corporates continue to feel the love of the market as the ML HY Index hit an all-time YTW low of 6.69%. The 10-year AAA muni closed the week at its lowest yield (3.10%) since Dec. 13, 2010. Stocks, oil, gold, silver and bonds cannot all sustain continued, symbiotic rallies forever.
25-Apr-11	Fixedated: April 18 - 21, 2011 Treasuries ended the week pretty much where they began as the market was able to shrug off the warning from S&P. After narrowly avoiding a government shutdown, the debt-ceiling debate will be accompanied by more grandstanding than a WrestleMania event. Corporates were mixed, but HY has shown more strength as the ML US HY Mstr II Index is now just 2 bps from its all-time low. The FactSet 10-year AAA Muni now sits at 3.18% -- a level not seen since December 31. We also pose the question, a 10% return for investing in a blue chip company... or 8.75% to fund a dividend payment for a highly leveraged company?
18-Apr-11	Fixedated: April 11 - 15, 2011 Treasury yields ended the week lower as the safety factor took center stage. Unresolved issues in the MENA region, Japan's struggles, more restructuring rumors for the PIIGS and inflation concerns in Germany and China have issues in the U.S. looking not so bad to some. Corporates were mixed as IG rallied with Treasuries and HY essentially trended flat. Munis held their own as a lack of high-grade supply helped the 10-year FactSet AAA yield grind a bit lower. We believe there are still relative values to be had in the AA-rated area as two noteworthy issuers placed 10-year paper last week at 4.00%.
11-Apr-11	Fixedated: April 4 - 8, 2011 Treasury yields ended the week markedly higher as the "risk on" mantra took hold and issues overseas started to become part of the "normal" state of things. With a new budget in place, the market can shift its focus to inflation concerns, the looming battle over increasing the debt ceiling, and the start of earnings season. Corporates were mixed as HY outperformed IG. The ML U.S. HY Mstr II Index YTW is now just 8 bps from its all-time low set on Feb. 21, 2011. Munis were off just a bit last week. A few good-sized deals this week may provide some of the price transparency the market has been seeking.
04-Apr-11	Fixedated: March 28 - April 1, 2011 Treasury yields rallied on Friday to end the week largely unchanged. Last week's auctions were greeted with a collective yawn by participants as the 2-, 5-, and 7-year sales were each met with tepid demand. The results were yet another reason for us to believe that there is not much support for Treasuries at current yields. Corporates were weaker across the board as the ML U.S. HY Mstr II Index rose above 7.00% for the first time in nearly two months. Munis are still holding their ground as supply remains extremely low.
28-Mar-11	Fixedated: March 21 - 25, 2011 Treasury yields ended the week higher as the news overseas failed to get markedly worse. With conditions in Japan and the MENA region not worsening -- and Europe's issues become part of the daily "norm" -- this week's auctions are unlikely to reverse the trend of rising yields. However, higher yields could at least equate to good demand. Corporates were mixed once again. The spread between the ML U.S High Yield Master II Index and the ML U.S. Corporate 7-10-year "A" Index has fallen 34 bps in 8 trading sessions. Munis were slightly weaker, but continue to hold their ground on light supply.
21-Mar-11	Fixedated: March 14 - 18, 2011 Last week was filled with tension and uncertainty as Japan and Libya continued to dominate the market's focus. The 10-year is being surprisingly sticky around the 3.30% level in the face of a resilient equity market. Corporates were mixed and the YTW spread between the ML U.S. HY Mst II Index and the ML U.S. Corp 7-10-yr "A" Index hit its widest level since January 11. The FactSet 10-yr AAA Muni Index yield headed lower as top-quality munis benefited from the flight-to-safety and continued limited new supply.
14-Mar-11	Fixedated: March 7 - 11, 2011 Treasuries took a wild ride as MENA unrest and the disaster in Japan outweighed Bill Gross's announcement that he is out of the Treasury market and decent economic numbers. Europe's debt issues are being pushed off the front page again even as major changes are afoot. Corporates were mixed as HY showed some weakness and IG piggybacked on the strength in Treasuries. Muni yields continued to slowly trend lower.
07-Mar-11	Fixedated: Feb. 28 - March 4, 2011 Treasury yields moved higher last week, but saw some wide swings as good economic data battled with MENA headlines and the oil rally for dominance. Oil prices may be saying that there is still a substantial amount of risk to be accounted for, but the bond market appears to be saying that the good economic data outweigh the tenuous state of the MENA region. Corporates were mixed as HY gained some ground while IG backed off a bit. Munis were stable moving in a range of just a couple of bps.
28-Feb-11	Fixedated: Feb. 22 - 25, 2011 Treasuries benefited from the safety trade last week. However, we question the conviction behind this move as overall interest at last week's auctions was tepid at best. Corporates were mixed as HY gave up some recent ground after touching yet another all-time YTW low while IG bond yields headed lower. Munis continued to regain lost ground as the FactSet AAA 10-year Muni Index yield has fallen 20 bps since February 11.
22-Feb-11	Fixedated: Feb. 14 - 18, 2011 Treasuries saw a tight trading range last week as inflation concerns were balanced out by geopolitical tensions. While we would not consider the Treasury market to be in a bubble, it is starting to make us feel like we are watching a rubber band being stretched back and forth. A rubber band can still snap back with considerable speed well before it reaches its breaking point. Both HY and IG corporates gained last week, but HY stole the show as the ML U.S. HY Mstr II Index touched all time lows for YTW and YTM at 6.77% and 7.29%, respectively. The 10-year FactSet AAA Muni Index is now at its lowest level since Jan. 11, 2011.
14-Feb-11	Fixedated: Feb. 7 - 11, 2011 Treasuries ended the week fairly flat as a holding pattern seems to have formed as the market waits for unrest in the Middle East to play out. There has been some commentary that the lack of a bigger Treasury rally in the face of the developments in Egypt could mean that participants have reassessed the "safety" of Treasuries. We think that is jumping the gun a bit. Corporate yields were slightly lower for the week as the ML HY Index came within 9 bps of its all-time YTW low on Wednesday. Munis moved sideways and seem to have found a new trading range after the recent selloff.
07-Feb-11	Fixedated: Jan. 31 - Feb. 4, 2011 Treasuries took a fairly big hit on the long end of the curve as the belief in the economic recovery is raising the specter of inflation again. As questions linger concerning China's property market, the Middle East and the unresolved European debt situation, it is too early to say that we will not see another leg down in yields. HY corporates continue to do well as the ML US HY Mstr II Index YTW held near its lowest yield since March 2005. However, IG bonds followed Treasury yields higher as the ML U.S. Corp 7-10-Yr A Index hit its highest yield since Dec. 15, 2010. The spread between the two is at its lowest level since July 2007.
31-Jan-11	Fixedated: Jan. 24 - 28, 2011 Treasuries remained range bound last week as the 10-year failed to break out of its 2011 range of 3.29% - 3.49%. HY debt may be getting ahead of itself. The ML US HY Mstr II Index's YTW is at its lowest level (7.01%) since March 2005 and is nearing its all-time low of 6.81% from Dec. 15, 2004. Limited muni supplies appear to be balancing out any fear-based selling supported by questionable default concerns. With no major auctions scheduled for the week, the market will be focused on earnings, Friday's employment report, and the unrest in Egypt.
24-Jan-11	Fixedated: Jan. 17 - 21, 2011 Treasury yields ended the week higher across the board, but the overall tone in the market is one of hesitation. High-yield corporates once again managed to outperform their investment-grade counterparts. Munis continued to see some headline pressure, but that has been partially relieved by crossover buyers opting for higher-yielding AAA munis over Treasuries.
18-Jan-11	Fixedated: Jan. 10 - 14, 2011 Treasuries had another volatile week as the 10-year swung about 20 bps between its high and low yield before ending the week where it started. Corporate high-yield debt has vastly outperformed high-grade debt since November 30. Munis are seeing their highest yields in two years while Illinois fired the first state income tax shot.
10-Jan-11	Fixedated: Jan. 3 - 7, 2011 Treasury yields saw a sharp, mid-week rise, but fought back to end the week mostly flat to slightly higher. The exception was the 30-year which held near the top of its 8-month yield range. Corporates were mixed again. After touching a 7.87% yield on Nov. 30, 2010, the ML US HY Mstr II Index has rallied 58 bps to 7.29%. The Factset AAA Muni 10-year Index reached its highest level since April 2010. This week, the focus will be on European debt auctions. Germany's sale is actually the one with the most potential to unsettle the market.
03-Jan-11	Fixedated: Dec. 27 - 31, 2010 Treasuries continued their manic behavior last week as the 10- and-30-year bonds swung 30 and 22 bps, respectively, before yields closed 8 and 12 bps lower. Last week's Treasury auctions were a mixed bag of surprisingly strong, disappointing, and trend-typical. Investment-grade corporates finally managed to outperform high-yield debt for the first time since late Nov. Munis moved sideways as the 10-year AAA muni held at 3.16% for the week.

21-May-12	Fixedated: May 14 - 18, 2012 Treasury prices soared to new heights as the yield on the 10-year hit an all-time low of 1.69% (overnight) last Thursday. Germany’s parental stance regarding Greece’s need to take its medicine may be weakening. There appears to be a growing belief among other members that the long-term solution may lie in the issuance of group-backed euro bonds. Corporates took a hit last week with yields on the investment-grade and high-yield indices rising 13 bps and 45 bps, respectively. Munis continue to be a compelling relative value trade vs. USTs as the percentage of relationship for 10-year AAA debt stands at 127%.
14-May-12	Fixedated: May 7 - 11, 2012 The investment world has reached yet another apex of fear. Greece’s newly adopted “Thanks for the help, but we have got it from here” stance towards further aid, China’s decelerating economy, and J.P. Morgan’s trading gaffe have investors piling into USTs. Greece's push back against previously negotiated austerity measures is akin to the tail trying to wag the dog. In this case, the tail is likely to get cut off if it continues to be a problem. Corporates were mixed. Investment-grade bonds continued to rally, hitting another all-time-low yield (3.53%), while high-yield sold off a bit. Munis continued to grind lower as investors sought out alternatives to USTs.
07-May-12	Fixedated: April 30 - May 4, 2012 Treasuries rallied last week on weak economic data and, of course, European debt fears. The elections in France and Greece over the weekend did nothing to quell the uncertainties investors face. When in doubt, take cover – and USTs are the ultimate security blanket. Corporates saw good strength across the board last week as the investment- grade and high-yield indices moved to lower yields. Munis gained a bit last week and relative value also improved.
30-Apr-12	Fixedated: April 23 - 27, 2012 Another week saw yet another series of disappointing events out of Europe, with Spain leading the way, and lackluster economic data in the U.S. (consumer sentiment and pending home sales notwithstanding). As such, the safety trade refused to loosen. Corporates gained across the board last week. The ML U.S. 7-10-year Corporate “A” Index hit an all-time-low yield (3.61%). Munis were fairly flat last week as participants took down the limited new-issue calendar with little trouble. The relative value argument for AAA munis remains intact.
23-Apr-12	Fixedated: April 16 - 20, 2012 Treasuries traded within a fairly tight range last week as concerns over Europe’s debt issues and political environment had investors seeking shelter. Add in demand from the Fed’s Operation Twist and yields can continue to be suppressed for quite a while. Corporates saw small gains last week. The ML U.S. 7-10-year Corporate “A” Index is just 6 bps from its all-time low yield. Munis held strong last week. With UST yields pushing lower, the relative-value argument for AAA munis is strong.
17-Apr-12	Fixedated: April 9 - 13, 2012 Last week’s Treasury auctions were met with modest demand – which one could argue actually implied weakened interest given the renewed focus on Europe’s debt woes. Corporates were mixed. The ML US 7-10-year Corporate “A” Index is now just 7 bps above its all-time-low yield of 3.62%. The FactSet AAA 10-year Muni Index yield has rallied over 20 bps in the past month and is now near its early-March low.
09-Apr-12	Fixedated: April 2 - 6, 2012 An unexpectedly weak March employment report caused Treasuries to rally and brought the 10-year yield down to its lowest point since the last FOMC meeting. Corporates were fairly sturdy with investment grade outperforming high-yield bonds for the week. Muni yields followed the rally in Treasuries amid decent new issue volume.
02-Apr-12	Fixedated: March 26 - 30, 2012 Treasuries ended the week with a modest gain as the market was reminded of the economic impact of austerity measures in Europe. The fact is, the threat never went away – and will not for a long time. Corporates were mostly flat as neither investment-grade nor high-yield bonds saw much of an impact from the movement in Treasuries. Munis gained a bit on the week. A drop in new issuance forced participants to look to the secondary market for supply.
26-Mar-12	Fixedated: March 19 - 23, 2012 Treasuries taketh and Treasuries giveth right back. After rising about 35 bps since March 12, the 10-year quickly took back as many as 15 bps by the end of last week. So much for runaway yields. Corporates were slightly weaker, but mostly treaded water as participants waited for a clearer picture of the direction of the Treasury curve to develop. Munis were stable as many new deals saw price bumps once again.
19-Mar-12	Fixedated: March 12 - 16, 2012 Treasuries took a hard fall last week as investor concerns about inflation drove some participants to the sidelines and others perhaps back into equities. Corporates were mixed as high-yield bonds managed a small gain while investment-grade debt followed Treasury yields higher. Munis were softer as well, but performed well relative to USTs.
12-Mar-12	Fixedated: March 5 - 9, 2012 While Treasuries were lower on the week on a softened safety trade, last week’s peak yield of 2.05% is still very low historically. As the triggering of Greek CDS failed to send the market into turmoil late Friday afternoon, those who have been steering a series of Greek bailouts took a victory swim around the Greek Islands. Corporates were weaker as well with high-yield bonds sustaining most of the damage. The muni market had some difficulties taking down a deluge of new issues and concessions were a common theme.
05-Mar-12	Fixedated: February 27 - March 2, 2012 Treasuries are still attracting safe-harbor interest as the market awaits the final outcome of Greece’s proposed debt restructuring and as Iran continues to make its neighbors, the U.S., and the oil market uneasy with its nuclear rhetoric. Corporates gained for the week as the investment-grade index finished just 2 bps off its all-time low yield of 3.62% and the high-yield index went below the 7.00% mark for the first time since last June. In the municipal market, California was the week’s big winner.
27-Feb-12	Fixedated: February 20 - 24, 2012 Even in the face of more positive U.S. economic data, Treasuries regained lost ground by week’s end. Explanations for the rally range from fears that the Greek debt deal will not end well or that the current backstop is insufficient, to Fed buying, to fears that escalated oil prices will derail the economic recovery. In our view, the Treasury market feels a bit overbought at this point. Corporates rallied across the board. The investment-grade and high-yield indices are now just 3 bps and 40 bps away from their all-time-low yield-to-worst, respectively. Munis were slightly weaker once again. CA will be a major focus this week.
21-Feb-12	Fixedated: February 13 - 17, 2012 Treasuries were slightly off last week with the 10-year yield finishing one basis point higher after rallying down to a yield of 1.91% mid week. Chalk one up for European leaders as they were finally able to agree to the second bailout package for Greece. Now the hard work begins – reinventing Greece’s economy. Corporates were mixed as high-yield bonds outperformed investment-grade debt. The ML U.S. High-Yield Master II Index is now just 59 bps away from its all-time low yield to worst. Munis were solid and saw a slight gain last week.
13-Feb-12	Fixedated: February 6 - 10, 2012 Buyers lined up at the UST 10- and 30-year sales (dollar demand for both was among the highest it has been in four years) as Europe continued to fumble its way through its debt crisis into the weekend. Greek leaders, however, were finally able to cobble together (and pass) a new austerity package. This still does little (if anything) to address Greece’s broken economy. Corporates were up a bit across the board as some investors sought the safety of investment grade while others stretched for more yield. Munis were also slightly weaker as AAA bonds could not catch up with the end-of-the-week UST rally.
06-Feb-12	Fixedated: January 30 - February 3, 2012 Treasuries were headed for a positive move last week until the January jobs report touched off hopes of better-than-expected economic growth. Yields remained relatively low as safety continued to trump data. Corporates were mixed. High-yield debt rallied as investors sought out alternatives to stubbornly low UST yields. The investment-grade index hit an all-time-low yield of 3.67% before backing up to 3.74% by the week’s end. Munis were slightly weaker, but demand for new issues remained strong.
30-Jan-12	Fixedated: January 23 - 27, 2012 Treasuries shook off the mid-week blues and rallied as the Fed extended its “low Fed funds rate” time frame to at least late-2014, Iran rattled the oil market, and Greece put up some verbal resistance to new bailout proposals. When times are tough, it is good to be the king – even if your crown is slightly tarnished. Corporates rallied across the board as more buyers reached for yield away from USTs. The A-rated index fell to 3.72% – just 3 bps from its all-time low. Munis rebounded and followed USTs to lower yields.
23-Jan-12	Fixedated: January 17 - 20, 2012 Treasuries could not hold on to a mid-week rally as the 10-year UST pushed through the 2.00% level for the first time since January 10. Hopes grew that Greece would reach a “haircut” deal with private creditors – a hope that has yet to come to fruition. All bets are off should negotiations fail. Corporates were mixed last week. Investment-grade bonds sold off with Treasuries while high-yield debt rallied as investors reached out on the risk spectrum. The muni rally finally fizzled last week following longer-maturity UST yields higher.
17-Jan-12	Fixedated: January 9 -13, 2012 Treasuries continued to ride the wave of global unrest (including the long-awaited S&P European downgrades) with the long end of the curve posting substantial gains for the week. However, it is hard to believe that S&P caught anyone off guard which makes linking the rally to the downgrades fairly suspect. Corporates rallied as investors continued to seek out more yield. Muni yields continued to grind lower with the FactSet 10-year AAA Muni hitting yet another low.
09-Jan-12	Fixedated: January 3 - 6, 2012 Treasuries ended the week mixed with the long end of the curve taking the most damage. This week brings the start of earnings season, a bevy of economic data, more tension in the oil market and yet another meeting between French President Sarkozy and German Chancellor Merkel. For managers that like volatility, this could be your week. Corporates rallied a bit last week. High-yield debt continues to perform well as the index has fallen 99 bps since Nov. 28, 2011. Munis continued to rally as the FactSet 10-year AAA Muni Index hit yet another all-time low at 2.23%.
03-Jan-12	Fixedated: December 27 - 30, 2011 Treasury yields moved lower as participants sought safety at the end of the year as Europe’s debt crisis – and its possible impact on the U.S economy should it worsen – continued to spook the market. Corporates followed the lead of Treasuries as both the IG and HY indices gained some ground. Munis ended the week strong as the FactSet 10-year AAA Muni Index hit a new all-time low yield.

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