Coming January 19: Treasury Will Auction A New 10-Year TIPS, One Worth Watching

Summary

  • A week away, the yield to maturity is estimated at 0.39%, not awful but also not really attractive.
  • The inflation breakeven rate of 1.99% indicates TIPS are no longer ‘cheap’ versus nominal Treasurys.
  • Looking ahead: 5 more auctions of this maturity in 2017.

This is a particularly interesting auction because it is the first new-issue TIPS since the election of Donald Trump on November 8 set off turmoil in the Treasury market.

Read my preview and analysis on SeekingAlpha.com

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I Bond Investors: Here’s Your Buying Guide For 2017

Summary

  • Advice: Do nothing for three months.
  • The current 2.76% variable rate is at risk, but the current fixed rate of 0.0% is too low.
  • It’s a waiting game: Watch the variable rate trend and hope for a higher fixed rate later in 2017.

U.S. Series I Savings Bonds are a boring, ultra-conservative investment that somehow drive many people – including a lot of very wealthy people – to scheme over buying strategies and fret over single basis-point rate swings. The key strategy is to buy them every year, up to the Treasury limit. But the question is: When?

Read my full analysis at SeekingAlpha.com

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Recapping 2016: The Year In Treasury Inflation-Protected Securities

Summary

  • TIPS yields started and ended the year at relatively high levels, but dipped at midyear.
  • TIPS outperformed the overall bond market as inflation expectations rose, increasing demand for TIPS and softening increases in yield.
  • Are today’s higher yields a head-fake, or a signal of buying opportunities to come?

Treasury Inflation Protection Securities had a promising beginning of 2016 for investors, then a serious slump in yields at midyear, and then a promising rise in yields again after the November elections.

What can we expect in 2017?

Read my full analysis at SeekingAlpha.com

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Defying The Naysayers: 5-Year TIPS Reopening Auctions With A Real Yield Of 0.12%

Summary

  • A bear market for Treasury Inflation-Protected Securities? Not based on this auction, which generated strong demand.
  • The coupon rate of 0.12% fell just below the coupon rate of 0.125%, meaning buyers had to pay a small premium for this TIPS.
  • TIPS have been out-performing the overall bond and Treasury markets over the last week. Inflation protection is still ‘in’.

TIPS have been on the move this week, with yields falling and prices rising. It’s a bit of a shock for those predicting a collapse in the Treasury market. And today’s auction was probably a bit of a disappointment for investors expecting a slightly higher yield.

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Read my full analysis on SeekingAlpha.com

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Attention Bankers: It’s Time To Raise Your Sorry CD Savings Rates

Summary

  • The Federal Reserve’s key short-term interest rate has increased 25 basis points.
  • Shorter-term Treasury yields have increased as much as 87 basis points since May.
  • But interest rates on bank CDs have barely budged. It’s time for savers to benefit from higher CD rates.

Read my full analysis – and join the discussion – on SeekingAlpha.com

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U.S. Inflation Rose 0.2% In November, But Holders Of Inflation Protected Investments Won’t Like This Report

Summary

  • November prices were choppy, with costs of gasoline and shelter creating most of the increase.
  • Non-seasonally adjusted inflation fell 0.16%, which will cause a drop in TIPS principal balances in January.
  • With rising real yields, TIPS are looking to be a strong investment in 2017.

Read my full analysis at SeekingAlpha.com

Also, I have updated my Tracking Inflation and I Bonds page with these new numbers.

And here are the new January Inflation Indexes for TIPS.

 

 

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Here’s How A Dedicated Cord-Cutter Views AT&T’s New ‘DirecTV Now’ Service

 Summary

  • The grandfathered promotional price of $35 for 100+ channels makes DirecTV Now very attractive to cord cutters.
  • And then you get a free 4th generation AppleTV? Isn’t this a no brainer?
  • With this aggressive pricing and expansive service, AT&T has fired a shot across the bow of its TV and cellular competitors.

Yup, this is way off-topic for me, but I’ve been using this innovative new streaming service for a week now and I’ve posted my analysis at SeekingAlpha.com, if you are interested. DirecTV Now includes CNBC, CNBC World, Bloomberg TV and Fox Business – along with a slew of news, sports and entertainment – at a very reasonable opening price.

Read the full article at SeekingAlpha.com

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