{"id":216220,"date":"2021-04-01T05:47:00","date_gmt":"2021-04-01T02:47:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/u-s-corporate-bonds-book-second-worst-quarterly-loss-in-history-why-it-isnt-all-bad\/"},"modified":"2021-04-01T05:47:00","modified_gmt":"2021-04-01T02:47:00","slug":"u-s-corporate-bonds-book-second-worst-quarterly-loss-in-history-why-it-isnt-all-bad","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/u-s-corporate-bonds-book-second-worst-quarterly-loss-in-history-why-it-isnt-all-bad\/","title":{"rendered":"#\n  U.S. corporate bonds book second-worst quarterly loss in history. Why it isn\u2019t all bad"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a41272d8e0e3\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a41272d8e0e3\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/u-s-corporate-bonds-book-second-worst-quarterly-loss-in-history-why-it-isnt-all-bad\/#Worst_loss_for_investment-grade_corporate_bonds_since_08\" >Worst loss for investment-grade corporate bonds since &#8217;08.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/u-s-corporate-bonds-book-second-worst-quarterly-loss-in-history-why-it-isnt-all-bad\/#Joy_Wiltermuth\" >Joy Wiltermuth<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  U.S. corporate bonds book second-worst quarterly loss in history. Why it isn\u2019t all bad<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\">\n<\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000217007\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       It has been a weird and wild past three months in financial markets, culminating in the worst quarterly loss for the biggest part of the $10.6 trillion U.S. corporate bond market since the 2008 global financial crisis.<\/p>\n<p> The investment-grade tracking ICE BofA U.S. Corporate index on Wednesday booked a negative-4.495% total return for the first quarter of 2021.<\/p>\n<div class=\"paywall\">\n       That marked the wost three months for the benchmark since its historic 7.49% loss in the third quarter of 2008, during the global financial crisis, according to analysts led by Hans Mikkelsen at BofA Global Research, who flagged the looming milestone earlier in the week.<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        renoImageFormat-\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:64.84375%;\" data-mobile-ratio=\"64.84375%\" data-layout-ratio=\"64.84375%\" data-subtype=\"\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-319054?width=140&amp;size=1.5421686746987953 140w,\nhttps:\/\/images.mktw.net\/im-319054?width=540&amp;size=1.5421686746987953 540w,\nhttps:\/\/images.mktw.net\/im-319054?width=620&amp;size=1.5421686746987953 620w,\nhttps:\/\/images.mktw.net\/im-319054?width=700&amp;size=1.5421686746987953 700w,\nhttps:\/\/images.mktw.net\/im-319054?width=860&amp;size=1.5421686746987953 860w,\nhttps:\/\/images.mktw.net\/im-319054?width=1260&amp;size=1.5421686746987953 1260w\" sizes=\"(max-width: 140px) 100px,\n(max-width: 540px) 500px,\n(max-width: 620px) 580px,\n(max-width: 700px) 660px,\n(max-width: 860px) 820px,\n1260px\" src=\"https:\/\/images.mktw.net\/im-319054?width=620&amp;size=1.5421686746987953\" data-enlarge=\"https:\/\/images.mktw.net\/im-319054?width=1260&amp;size=1.5421686746987953\" alt=\"\" title=\"Worst loss for investment-grade corporate bonds since '08.\"><\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\">\n<h4 class=\"wsj-article-caption-content\"><span class=\"ez-toc-section\" id=\"Worst_loss_for_investment-grade_corporate_bonds_since_08\"><\/span>Worst loss for investment-grade corporate bonds since &#8217;08.<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>      <span class=\"wsj-article-credit article__inset__image__caption__credit\" itemprop=\"creator\"><br \/>\n            BofA Global Research<br \/>\n          <\/span><br \/>\n  <\/figcaption><\/figure>\n<\/div>\n<p>       Mikkelsen\u2019s team noted the latest quarterly loss for the index exceeded the negative-4.05% return recorded during the liquidity crisis that erupted in the first quarter of 2020 at the onset of the coronavirus pandemic in the U.S. <\/p>\n<p>It also surpassed the 3.36% loss booked in the second quarter of 2013 as a result of the \u201cTaper Tantrum,\u201d a volatile period sparked by then-Federal Reserve Chairman Ben Bernanke, who in late June of that year said the central bank planned to roll back its bond-buying program later in the year.<\/p>\n<p>But bond-market pros said the recent rough patch for corporate bonds doesn\u2019t necessarily mean red flags for the market.<\/p>\n<p>\u201cYou can see these poorer returns when things are going well,\u201d Collin Martin, fixed-income strategist at the Schwab Center for Financial Research, told MarketWatch. \u201cI\u2019m not panicking too much, because the outlook is positive.\u201d<\/p>\n<p>Martin pointed to the 10-year Treasury yield<br \/>\n        TMUBMUSD10Y,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.000%\" channel=\"\" class=\"\">1.744%<\/bg-quote><br \/>\n       rising to a one-year high of 1.749% as of Wednesday as a catalyst for the rough quarter, but suggested that the spike in yields serves less of a warning shot than a nod to the economy\u2019s continued recovery from the worst public-health emergency in a century, and that \u201cwe are getting closer to the exit of the pandemic.\u201d<\/p>\n<p>The benchmark Treasury yield has increased by about 1.24% from a historic low of 0.514% in August, according to Dow Jones Market Data.<\/p>\n<p>\u201cFifty basis points on the 10-year Treasury might have made sense when half of the world was shut down and we didn\u2019t know what the future looked like,\u201d Martin said.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>But even with rising benchmark rates, he still thinks it\u2019s a \u201cborrower\u2019s market,\u201d with overall yields hovering near historic lows.<\/p>\n<p>Corporate bonds are priced <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/fred.stlouisfed.org\/series\/BAMLC0A0CM\" class=\"icon none\">at a spread<\/a>, or premium, above the risk-free Treasury rate, which aims to compensate investors for the added risk of a company\u2019s potential to default.<\/p>\n<p>\u201cIt\u2019s interesting, because credit spreads are tighter now than at the beginning of the year,\u201d said John\u00a0Luke\u00a0Tyner, fixed-income analyst at Aptus Capital Advisors. \u201cAll of the pain has come from interest-rate risk.\u201d<\/p>\n<p>Tyner said many corporations this year \u201csaw the writing on the wall,\u201d and moved  to lock in lower borrowing costs on the expectation that benchmark yields would continue to climb from the lows.\u00a0<\/p>\n<p>The yield on the <strong><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/fred.stlouisfed.org\/series\/BAMLC0A0CMEY\" class=\"icon none\">ICE BofA US Corporate Index<\/a><\/strong> was last spotted at 2.28%, down from a pandemic high of about 3.68% a year ago.<\/p>\n<p>The sector\u2019s popular exchange-traded fund, the <strong>iShares iBoxx $ Investment Grade Corporate Bond ETF<\/strong><br \/>\n        LQD,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/206919681\/composite\" class=\"positive\">+0.26%<\/bg-quote><span>,<\/span><br \/>\n       was down 5.9% on the year to date, according to FactSet.<\/p>\n<p>\u201cMoving forward, I\u2019m a little nervous,\u201d Tyner said, adding that \u201cthe rate risk is really high, but you are getting paid really nothing in terms of credit risk.\u201d<\/p>\n<p><em>Sunny Oh contributed reporting<\/em>.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Joy Wiltermuth\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Joy_Wiltermuth\"><\/span>Joy Wiltermuth<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B21005575-02D4-D4B5-4572-D34FAF96C58E%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# U.S. corporate bonds book second-worst quarterly loss in history. Why it isn\u2019t all bad &#8221; It has been a weird and wild past three months in financial markets, culminating in the worst quarterly loss for the biggest part of the $10.6 trillion U.S. corporate bond market since the 2008 global financial crisis. The investment-grade&#8230;<\/p>\n","protected":false},"author":1,"featured_media":216221,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-216220","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/216220","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=216220"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/216220\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/216221"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=216220"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=216220"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=216220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}