Last week, interest rates moved slightly lower, with the 10-year T-Note falling about 7 basis points from 0.71% to 0.64%, a retracement of 37% toward the 0.51% August 4 low. Like its brethren, the 30-year T-Bond fell 10 basis points from 1.45% to 1.35%, a 38% retracement to the 1.19% low (also August 4). Some of the up-move had to do with the “Inflation Scare” discussed in last week’s …Read More
Tag Archives: bond market
The Economy: Navigating Scylla & Charybdis
In Greek mythology, Scylla and Charybdis were mythical sea monsters existing on the opposite sides of the Strait of Messina, between Sicily and the Italian mainland. Scylla was a six headed sea monster; Charybdis a huge whirlpool. Because they were so close together, any passing ship was threatened. In Homer’s Odyssey, Odysseus passed close to Scylla, losing only a few sailors rather than risking losing his whole ship in …Read More
Corona, Corona, Corona Bonds Really Do Have More Fun!
The equity market finally showed some sensitivity to the effects of the coronavirus (Covid-19) last week with the S&P 500 falling 1.25% from its record high close on Valentine’s day for the holiday shortened week. The leading issue which dominated every news cycle (except for the Democratic debate for a few hours) was Covid-19 and the economic uncertainties surrounding it. Markets rose on news or speculation that infection cases were …Read More
FOMO, Momentum, The Fed, But No Fundamentals
As of this writing, the equity markets are on a three-day losing streak, caused by less optimism on the “trade war” file. And, while there were some positives in recently released economic data, most major economic indicators continue to show business contraction. The equity market has been driven by “the economy is strong” narrative, FOMO (Fear of Missing Out), momentum, and the injection of huge amounts of liquidity by the Fed (QE4). Unfortunately, …Read More
Look For The Preponderance Of The Evidence, Don’t Rely On One Factor
The headline on my LinkedIn page on Friday (October 4th) read: “Jobless rate reaches half-century low, HP plans to cut up to 9,000 jobs…” Is this good news about jobs, or bad? I’ve learned many times over the years to rely on the preponderance of the evidence, and not on any single indicator. The jobs numbers, themselves indicate that the economy is still expanding. But, the lower level of job creation, along with …Read More
