Cumberland Advisors Market Commentary – 2Q2019 Review: Total Return Taxable Fixed Income

Author: Daniel Himelberger, Post Date: June 25, 2019
image_pdfimage_print

Treasury yields dropped precipitously throughout the second quarter of 2019, with the biggest decline seen in the short to intermediate maturities. As of 6/20/19 the most sizable decline was in the 2-year Treasury, which dropped 54 bps to 1.724%, while the 30-year Treasury lagged this drop in yield but still declined 28.2 bps to 2.533%. The drop in yield across the Treasury curve was propelled by an increase in bets that the Fed is done hiking short-term interest rates and will instead start cutting as we approach year end.

Cumberland Advisors - Dan Himelberger - Portfolio Manager & Fixed Income Analyst

Market participants all turned their attention to the 6/19/19 FOMC meeting for clues as to what we should expect for the rest of the year. While the FOMC left the target range for the fed funds rate unchanged at 2.25–2.50%, they did indicate a dovish bias. The dovish tone was accompanied by eight participants projecting rate cuts in 2019, as seen in the FOMC’s dot plot. The most significant change to the Committee’s statement appeared in the policy guidance section, which stressed increased “uncertainties” in the economic outlook and shifted the language from taking a “patient” approach to focusing on “taking the appropriate action to sustain the expansion.” We expect the Fed to remain “data-dependent” moving forward, and  not allow market participants to force their hand in either direction.

Cumberland Advisors’ taxable strategy remains conservative in the face of uncertainty in the markets. We continue to be defensive, with a focus on capital preservation, while choosing opportunities to extend durations.

Daniel Himelberger
Portfolio Manager & Fixed Income Analyst
Email | Bio


Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.

Sign up for our FREE Cumberland Market Commentaries

Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.

cumber map
Cumberland Advisors® is registered with the SEC under the Investment Advisers Act of 1940. All information contained herein is for informational purposes only and does not constitute a solicitation or offer to sell securities or investment advisory services. Such an offer can only be made in the states where Cumberland Advisors is either registered or is a Notice Filer or where an exemption from such registration or filing is available. New accounts will not be accepted unless and until all local regulations have been satisfied. This presentation does not purport to be a complete description of our performance or investment services. Please feel free to forward our commentaries (with proper attribution) to others who may be interested. It is not our intention to state or imply in any manner that past results and profitability is an indication of future performance. All material presented is compiled from sources believed to be reliable. However, accuracy cannot be guaranteed.
Loading...