Advisories, Observation Deck

 

Observation Deck
February 03, 2014 Posted by
Observation Deck is a monthly newsletter published by the SVB Asset Management team. In this February 2014 issue our headline commentary, What Investors Can Expect in 2014, covers what to anticipate from the Fed in the year ahead with the confirmation of Janet Yellen as the new head of the central bank.
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Observation Deck
January 03, 2014 Posted by
There is an old saying in the trading world, "sell on the rumor and buy on the news." This quote fits perfectly with how the bond market reacted to events in 2013. The year began with hopes of a "Great Rotation," in which investors would sell bonds and invest in riskier assets such as equities, which prompted speculation that yields would increase. Despite vastly improved economic fundamentals in the U.S., bonds remained well-bid as the Fed made no indication that it would tighten in the near future. This is not to say that there wasn't any volatility in the bond market.
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Observation Deck
December 02, 2013 Posted by

One of the most relevant metrics this past year has been the unemployment rate. The driving force behind the focus on the unemployment rate has been the slow road to recovery post the financial crisis in which the U.S. lost over 8 million jobs, as well as the Federal Reserve announcement that it is targeting an unemployment rate of 6.5 percent before raising interest rates. Since that target was announced the unemployment rate has garnered a lot of attention.

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Advisories
October 11, 2013 Posted by
To ease the corporate cash investment process, you may wish to adopt a methodology for categorizing your corporate cash by its usage.
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Advisories; Observation Deck
October 01, 2013 Posted by
At the September Federal Open Market Committee (FOMC) meeting, which was regarded as the most highly anticipated meeting of the year, officials jolted markets with the announcement of no tapering of bond purchases at this time. In the headline commentary of Observation Deck, "Summer of Volatility," portfolio manager Renuka Kumar discusses how recent bond market volatility has been driven by the Fed and monetary policy.
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Advisories
September 24, 2013 Posted by

The Fed's decision in September not to scale back bond purchases will support the markets in the short term, but could have long term consequences.  This regular review of Fed activity discusses the market's reaction to the non-taper as well as the potential for Fed action in the near future.

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Advisories
September 18, 2013 Posted by
FOMC Announcement - September 18, 2013 - The Federal Reserve today decided to keep the target range for the federal funds rate unchanged at 0 to 0.25 percent with many revisions to previous announcement and added some new statements. They maintain that policymakers suggest the U.S. economic activity has been expanding at a "moderate" pace which is a change from last month's phrase of "modest." On the economy, they added that the "tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market."
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Observation Deck
September 03, 2013 Posted by
Financial yields have rallied substantially since the credit crisis of 2008–2009. According to Barclay’s indices, the differential between intermediate industrial and financial sectors bond spreads has tightened significantly, with a mere 11 bps differential as of the end August 2013.
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Observation Deck
August 01, 2013 Posted by
Market speculation on the timing of the Fed’s tapering has caused volatility in the bond market. Global corporate new bond issuances declined materially in June 2013 compared to robust issuance levels during the first five months of 2013. Nonetheless, we generally expect corporate credit risk to remain steady through 2013, with divergence in credit trends among various sectors. While investment grade corporate credit spreads initially widened 16 bps on speculation of the Fed’s tapering bond purchases, they have recently tightened by around 20 bps to 76 bps around mid-July.
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