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Bonds Down, But Not Out 📝
Did you know that the U.S. bond market, often considered a safe haven, can sometimes be as volatile as stocks?
Did you know that the U.S. bond market, often considered a safe haven, can sometimes be as volatile as stocks?
This year has proven to be a challenging one for bond investors, but there is still hope on the horizon.
Here’s what you need to know in this edition of Equity Eats:
Another Down Year For Bonds: First, the U.S. bond market continues to struggle, with falling prices pushing total returns to -3.0% 📉
Perhaps Better Times Ahead For Bonds: Next, there is cautious optimism among fixed income experts who believe that bond performance could improve if the Federal Reserve enacts a few rate cuts later this year 👀
Housing Start Weakened In March, What Could Be Next? Finally, housing starts have dropped significantly, down about 15% from the previous month, but there’s potential for a rebound in demand 🤔
Stay tuned as we take a look at these topics and explore what they mean for your investment strategy!

Another Down Year For Bonds 📉
The U.S. bond market is once again proving to be a minefield.
Falling prices have pushed bond total returns for bonds to -3.0% this year, and no area of the market has been spared—even “junk” bond total returns are barely in positive territory, on average, despite yields above 7% 👎
Many analysts expected better.
The story heading into the year was that the Federal Reserve would cut interest rates sharply, giving bonds a tailwind, but that hasn’t played out 🤷🏻

Perhaps Better Times Ahead For Bonds 👀
Fixed income experts see the climate for bonds improving if the Fed manages to push through a cut or two later in the year.
Yields are attractive, and if the economy stays healthy, credit metrics should hold up, supporting prices in corporate debt.
All that could make for somewhat better opportunities within the bond universe, particularly in investment-grade corporate and high yield bonds 🤑
But they will still underperform stock dramatically.

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Housing Start Weakened In March, What Could Be Next? 🤔
Housing starts, a government measure of the beginning of construction on a new housing unit, slid to a seasonally adjusted annual rate of 1.32 million in March, down about 15% from the month prior.
There is a notable fall in brand-new multifamily construction because of the higher cost of money and the flattening of rental gains.
Meanwhile, higher mortgage rates could weigh on buyers in the near term 😨
Potential for demand growth is there, but buyers are hesitating until they can better gauge where interest rates are headed.
Stability in interest rates will likely come sooner rather than later 🗓️

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