Summertime usually means quieter financial markets, but the recent heat wave and school vacation have done little to temper animation across global markets.
May did see a pickup in prepayment speeds, as we discussed in our last update. 30 year mortgage rates have declined in 4 of the last 5 weeks, but remain noticeably higher than at this point last year. Still, the housing market appears robust, despite what has been a rapid increase in prices.
In the bond market, yields on market offers continue to improve even as prices yo-yo. Fears of a trade war have been spooking investors off and on, leading to the ten year Treasury yield continuing a declining trend started back in May. That has helped contribute to a recovery in existing portfolio values, which offers some peace of mind but does not alter our buy-and-hold strategy. Supplementing with newer bonds as they become available at deeper discounts should continue to improve long term returns.
This information is not intended to be used as the only basis for investment decisions, nor should it be construed as advice designed to meet your particular needs. You are advised to seek the advice of your financial adviser, legal or tax professional, prior to making any investment decision based on any specific information contained herein.
