Bonds poised for a big comeback next year

  • U.S. bonds could see big gains if yields continue to fall
  • 1-year Treasury bills could return about 5.2% even without a change in yields
  • 10-year and 30-year Treasurys could see gains of 12.3% and 21.8% respectively if yields drop by 100 basis points
  • Returns would be negative if bond yields increase by another 100 basis points
  • Investors have been opting for short-term Treasury bills
  • Nuveen is finding opportunities in securitized assets, preferred securities, investment-grade corporate bonds, and senior loans
  • Stocks are on pace for modest gains after signs of a cooling labor market

U.S. bonds could see significant gains next year if yields in the Treasury market continue to decline. Even without a change in yields, 1-year Treasury bills could return about 5.2%. However, if yields drop by another 100 basis points, 10-year and 30-year Treasurys could see gains of 12.3% and 21.8% respectively. On the other hand, if yields increase by another 100 basis points, returns would be negative. Many investors have been opting for short-term Treasury bills to mitigate risk. Nuveen is finding opportunities in securitized assets, preferred securities, investment-grade corporate bonds, and senior loans. Meanwhile, stocks are on pace for modest gains after signs of a cooling labor market.

Factuality Level: 7
Factuality Justification: The article provides information about the potential gains in U.S. bonds next year based on the decline in yields. It includes quotes from Nuveen Chief Investment Officer Saira Malik and provides estimates for the potential returns of different Treasury bonds. The article also mentions the negative returns if bond yields increase. The information provided is based on market data and statements from experts, but it lacks in-depth analysis and may not consider all factors that could impact bond yields.
Noise Level: 7
Noise Justification: The article provides some analysis on the potential gains in the U.S. bond market next year based on the decline in yields. It also mentions the negative consequences of owning long, low-coupon bonds when rates suddenly spike. However, the article lacks scientific rigor and intellectual honesty as it does not provide evidence or data to support its claims. It also dives into unrelated territories by mentioning the stock market and potential Fed rate cuts, which are not directly related to the main topic of U.S. bonds.
Financial Relevance: Yes
Financial Markets Impacted: U.S. Treasury market
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the potential gains in the U.S. bond market based on the movement of yields in the U.S. Treasury market. It does not mention any extreme events or their impact.
Public Companies: Nuveen (null), Bloomberg (null), FactSet (null), iShares (null), Silicon Valley Bank (null), Signature Bank (null)
Key People: Saira Malik (Chief Investment Officer)

Reported publicly: www.marketwatch.com