| Wednesday, September 11, 2019 |
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|---|---|---|---|---|---|---|---|---|
| MANAGING DIRECTOR: Scott Carrithers PORTFOLIO SALES AND SERVICE: Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty Kevin Doyle • Lonnie Harris • Mark Tranckino • Robert Schuyler • Tom Toburen • Josh Kiefer Nicole Burczyk • Kelley Frye • Natalie Regan • Aaron Stoffer • Chuck Honeywell |
| US Treasury Market | |||||||||||
| Date | 1 mo | 3 mo | 6 mo | 1 yr | 2 yr | 3 yr | 5 yr | 7 yr | 10 yr | 20 yr | 30 yr |
| 09/04/19 | 2.05 | 1.97 | 1.87 | 1.69 | 1.43 | 1.36 | 1.32 | 1.40 | 1.47 | 1.77 | 1.97 |
| 09/05/19 | 2.05 | 1.97 | 1.88 | 1.73 | 1.55 | 1.47 | 1.43 | 1.51 | 1.57 | 1.86 | 2.06 |
| 09/06/19 | 2.05 | 1.96 | 1.88 | 1.73 | 1.53 | 1.46 | 1.42 | 1.50 | 1.55 | 1.83 | 2.02 |
| 09/09/19 | 2.04 | 1.96 | 1.87 | 1.74 | 1.58 | 1.52 | 1.49 | 1.57 | 1.63 | 1.91 | 2.11 |
| 09/10/19 | 2.04 | 1.95 | 1.89 | 1.81 | 1.67 | 1.61 | 1.58 | 1.66 | 1.72 | 2.00 | 2.19 |
CD Portfolio Check
Most bank bond portfolios have at least a few CD’s included in their mix. CDs can offer spread over US Treasury Notes and Agency Bullets, making them an attractive purchase. Along with the spread, the FDIC guarantee provides an additional level of comfort as to the creditworthiness of this investment. As banks, we know the limit on FDIC is $250,000, so with bank CDs this is no different, though keep in mind the outstanding interest in between payments should be considered as well.
Currently there are about 250 issues being offered with a heavier weighting in 2019 and 2020. As outlined below, the CD curve has a similar inversion to the Treasury curve. The average yields are shown for each maturity in both bullet and callable structures. These include money center banks, but on average the big banks are issuing CD’s 5-15bps cheaper than the average shown. The reason for this is the frequency of their issuance – they have been issuing CDs regularly and a lot of investors have hit the FDIC limit with them.
CDs should be considered when looking to put cash to work. CD Issuers change daily, so it could be a good idea to send your portfolio manager a listing of your current CD holdings to see if there are any opportunities to pick up a higher yielding issuer the portfolio does not already own.
Source: Bloomberg, L.P. as of 9/11/2019
This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.
•Not FDIC Insured •No Bank Guarantee •May Lose Value