AGG At 52-Week Low; T-Note Yield Hits 2.13%


Yields on 10-year U.S. Treasurys hit their highest level in 13 months early Tuesday, breaking above 2.11 percent amid a stock market rally that was centered on what appears to be improving sentiment about the U.S. economy's short-term outlook.

The latest round of fresh data released Tuesday included a positive read on consumer confidence-the Conference Board's monthly Consumer Confidence Survey showed U.S. consumer confidence in May came in at a five-year high.

Tuesday also brought the latest read on the U.S. housing market-for the third-straight month, U.S. home values rose year-on-year, with average home prices up more than 10 percent in the past year ended March, according to the S&P/Case-Shiller Home Price report.

The data helped push the U.S. stock market higher, with the S&P 500 Index and the Dow Jones industrial average each up just under 1 percent Tuesday. The momentum also pushed yields on 10-year notes up more than 6 percent to 2.13 percent-their highest level since April 2012. As bond prices drop, yields rise.

Funds like the iShares Core Total Bond Market Fund (NYSEArca:AGG), tracking the broad Barclays U.S. debt index comprising largely U.S. Treasurys, were again losing ground. AGG dropped below a 52-week low at the outset Tuesday, and worked its way lower to $109.17 a share at one point, its lowest price strike since March 2012.

AGG, which has more than $15 billion in assets, has now dropped 1.5 percent in the past month alone, as U.S. stocks have rallied.

"Consumers' assessment of current business and labor-market conditions was more positive and they were considerably more upbeat about future economic and job prospects," Lynn Franco, director of Economic Indicators at the Conference Board, said in a press release.

"Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike and sequester," Franco said.

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This article appears in: Investing , ETFs

Referenced Stocks: AGG



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