IEF

U.S. Treasuries are poised to come in even despite having a very volatile first six months of 2024. A Bloomberg index of returns in this bond market has declined a mere 0.1% for the year. It fell as much as 3.4% in April. The rebound indicates that investor outlook might be positive in light of falling U.S. prices prompting the Federal Reserve to cut interest rates sooner. "We've seen the peak in yields," Stephen Miller, investment strategist at GSFM in Sydney, told Bloomberg. "Bonds are now back as having a deserved place in a multi-asset portfolio." Treasuries have been sent in opposite directions in 2024 as policy-sensitive two-year yields have soared above 5% in April as fea

The U.S. economy grew at an annualized rate of 1.3% in the first quarter of 2024, marking a downward revision from the advance estimate of 1.6%. This represents the slowest growth rate since the second quarter of 2022. The revision was primarily driven by a decrease in real consumer spending, which was adjusted down from 2.5% to 2%. The GDP report from the Bureau of Economic Analysis, released Thursday, also indicated a slight downward adjustment of 0.1 percentage points in both the headline and core Personal Consumption Expenditure (PCE) price index for the last quarter. The slower-than-expected growth and marginally lower inflation figures eased Treasury yields, with the 10-year

The Federal Reserve’s recent policy decision kept interest rates unchanged, continuing since July 2023. However, it announced a significant reduction in its quantitative tightening (QT) program, starting in June. QT involves selling off assets to decrease money supply and raise interest rates. This move follows massive bond purchases during the pandemic, which suppressed interest rates. While QT can help control inflation, it also reduces liquidity in the economy and can lead to higher interest rates and tighter monetary conditions. The Fed aims to avoid a repeat of the 2019 “repo crisis” caused by QT, and plans to scale back QT to $25 billion, more than half of its current rate.

Federal Reserve Chair Jerome Powell stated on Tuesday that a prolonged period of restrictive monetary policy may be necessary, refraining from offering explicit guidance on a rate-cutting strategy. Economists interpreted this as a clear indication that the central bank is likely to maintain a “higher for longer” approach. The Hawkish Schiff: Economist Peter Schiff, in a post on X (formerly Twitter), challenged Powell’s characterization of the current monetary policy as restrictive, asserting that it remains loose. Schiff advocated for rate hikes, expressing concerns that prolonged loose policy would exacerbate inflationary pressures. “The longer the Fed maintains its current policy, th

U.S. Treasury yields have reached their highest levels since mid-November 2023, driven by a mix of economic resilience, persistent fiscal spending and resuming inflationary pressures. These factors are steering the market’s expectations away from earlier predictions of imminent Federal Reserve rate cuts, significantly impacting the cost of issuing U.S. government debt. Treasury Bond ETFs Fall To Mid-November 2023 Lows On Monday, the yield on the 10-year Treasury note hit 4.61%, a peak not observed since Nov. 14, 2023. This represents a substantial increase of approximately 40 basis points since the beginning of the month. Additionally, the daily chart for the 10-year Treasur

A bond trader has just placed a record-breaking single bet by going long on December 2024 short-term interest rate futures. This strategy will pay off if the Federal Reserve cuts interest rates at least three times by the end of the year, a scenario that is not yet fully priced into the market following recent robust economic data and higher-than-expected inflation figures. The Secured Overnight Financing Rate (SOFR) futures — the tool used to assess market wagers on Fed interest rates — suggest that traders are anticipating a total of 68 basis points in rate cuts by the end of the year. What Happened: A significant transaction involving 75,000 December 2024 SOFR futures contracts

In March, the U.S. labor market surged beyond predictions, with 303,000 nonfarm payrolls added, surpassing expectations of 212,000. This marked the highest figure since May 2023 and accompanied a slight decrease in the unemployment rate from 3.9% to 3.8%. We covered it first here: US Labor Market Heats Up In March: Payrolls Grow By 303,000, Highest In 10 Months, Dampen June Rate Cut Hopes The robust report dashed hopes for Federal Reserve rate cuts, exacerbated by hawkish comments from Fed speakers, further dampening investor expectations. The unexpected decrease in the unemployment rate from two-year highs and the anticipated rise in earnings signaled a tight labor market also rei

The yields on U.S. Treasury notes have almost entirely retraced their surge following the release of the hotter-than-expected January inflation report. This indicates a swift shift in investor sentiment amidst conflicting economic indicators. The 10-year Treasury note saw a decrease to 4.21% during Thursday morning’s trading in New York. This marks a five basis point drop after a six basis point decline the previous day. This movement erased the gains seen in the wake of the inflation data. Yields are back to their pre-report levels of approximately 4.17-4.18%. Despite a higher-than-expected inflation rate for January, the anticipated impact on longer-dated maturities was short-liv

Let's Rewind 2022 and 2023 were hectic - war, bank crises, and bear markets. Inflation was still running rampant - with the core PCE having just peaked at +6.4% in February 2022. These consistent out-of-control inflation reports caused the Federal Reserve to take action by doing the only thing they know how to do - raise interest rates. Starting in March 2022, the Fed raised rates at the fastest speed in modern history - from essentially 0% to 4.75% in only 12 months. As you can imagine, this rapid increase in interest rates caused bond prices to go into a free fall. For those of you unaware, bond prices move inversely with interest rates. Think about it like this - if you're an invest

Russia launched an unprecedented aerial attack on Ukraine, firing 122 missiles and deploying numerous drones, resulting in the tragic death of at least 22 civilians. Ukrainian officials have described it as the most extensive aerial barrage since Russia’s full-scale invasion in February 2022. The Ukrainian air force claims to have intercepted most of the ballistic and cruise missiles, showcasing the country’s defense capabilities in the face of the relentless assault. See Also: Trump-Putin Friendship? Fiona Hill Reveals Putin ‘Has Trump’s Number’ And Still Views Him ‘As An Asset’ President Volodymyr Zelenskyy highlighted the diverse array of weapons used by Russia, including ba

For the first quarter of 2024, JPMorgan Chase & Co (NYSE:JPM) is for overweight U.S. equity, Japanese equity, U.S. Treasury and high-yield corporate debt. The company said “cash returns are set to fall” and the U.S. stock market would “likely see the S&P 500 test the 5,000 level in 2024.” Read: 2024 Outlook: Put, Pause, Pivot John Bilton, head of Global Multi-Asset Strategy at JPMorgan, and his team shared insights from the Multi-Asset Solutions Strategy Summit they had recently. “We see positive U.S. stock performance broadening beyond tech as an improving U.S. inventory cycle boosts cyclical sectors,” said Bilton. “Japanese stocks remain attractive, given rerating potential driven

BlackRock Inc (NYSE:BLK) doesn’t anticipate rate cuts until the second half of 2024. The shape of the yield curve and the trajectory of growth will be key drivers of returns. Gargi Pal Chaudhuri, head of iShares Investment Strategy Americas at BlackRock, shared her view on the outlook. “The shape of the yield curve is now signaling that it's time to consider allocating out of cash,” noted Chaudhuri. She believed that sitting in cash in 2024 would mean missing out on bond and equity market returns. Chaudhuri identified opportunities to deploy cash selectively across asset classes: Fixed income: pairing intermediate duration core holdings with differentiated income-seeking exposu

October jobs report numbers missed expectations Friday, and came in at nearly half of September's reported figures. Non-farm payrolls increased by 150,000 jobs in October, registering a steep decline from September's 297,000 jobs. The figure fell short of market forecasts, which stood at 180,000. One key reason for the deceleration is likely the United Auto Workers strikes, which resulted in a net loss of jobs for the manufacturing sector. Market Reaction To The US Jobs Report Treasury yields tumbled across the board. The yield on the two-year Treasury fell to 4.87%, a decrease of more than 10 basis points, while the 10-year Treasury yields fell by 11 basis points to 4.56%. The ben

The U.S. Treasury released its quarterly refunding statement Wednesday, letting anxious bond holders catch some breath. The “Treasury currently expects privately-held net marketable borrowing of $776bln in Q1 FY 2024… lower than what was cited at the August refunding, primarily due to projections of higher receipts which were somewhat offset by higher outlays,” the report said. While the Fed’s FOMC meeting Wednesday is in the spotlight for most market watchers, fixed income investors are watching the U.S. Treasury. The Treasury’s borrowing plans help bond market investors such as those invested in the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), the iShares 7-10 Year Treasury Bon

On CNBC’s "Halftime Report Final Trades," Josh Brown of Ritholtz Wealth Management named iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) as his final trade. Jim Lebenthal of Cerity Partners picked Wynn Resorts, Limited (NASDAQ:WYNN). Las Vegas Sands (NYSE:LVS), last week, reported better-than-expected third-quarter financial results. "I think you got a good report coming up in a couple of weeks [from Wynn Resorts]," he noted. HSBC recently initiated coverage on the stock with a Buy rating and a $111 price target. Don’t forget to check out our premarket coverage here Stephanie Link of Hightower said she likes McDonald's Corporation (NYSE:MCD), which is down 14% from its highs.

To gain an edge, this is what you need to know today. Buying In Stocks Please click here for a chart of iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF). Note the following: The trendline on the chart shows that IEF has been in a downtrend. IEF being in a downtrend means that the yield on 10 year Treasuries has been rising. This has been putting pressure on the stock market. The chart shows that IEF bounced yesterday and is bouncing more today as yields pull back from the psychologically important 5% level. The pullback in yields is bringing in buyers. Two very important earnings for the stock market are Microsoft Corp (NASDAQ:MSFT) and Alphabet Inc Class C (NASDAQ:GOOG). Both repo

The yields on 10-year Treasury bonds surged to 4.98% in early morning trading on Thursday, reaching their highest level since mid-July 2007. As yields approached the significant 5% milestone, Wall Street reacted. In a note shared on Thursday, Vishal Khanduja, managing director and portfolio manager at Morgan Stanley Investment Management, expressed the view that a 5% yield on 10-year US Treasuries presents an attractive buying opportunity for investors. According to Khanduja, it’s an excellent chance to extend the duration of a portfolio. Goldman Sachs analysts, including Arun Prakash, CFA, and John Marshall, believe that 10-year Treasuries have underperformed their usual relationship

The Federal Reserve’s commitment to maintaining higher interest rates for longer has unleashed seismic tremors within the bond market, culminating in an explosive surge in yields across all maturity periods. Initially, the reverberations were absorbed by 2-year yields, a segment that had historically been swift to react to policy cues from Powell and the Fed. But as investors adjust their interest rate projections, the intense surge in Treasury yields is now extending its reach to longer-term maturities. At the latest FOMC meeting, the Fed left the rate unchanged in the 5.25%-5.50% range, but macroeconomic projections indicated a median preference for another rate hike in 2023, and tr

Lawrence Summers, who previously served as the U.S. treasury secretary in the Clinton administration, has recently voiced concerns regarding the potential rise in 10-year yields, anticipating them to be significantly higher than what we’ve seen in the last 20 years. The expected increase in government budget deficits will likely draw more attention from investors, Summers said in an appearance on Bloomberg Television’s “Wall Street Week” with David Westin. Summers stood among the earlier forecasters of an economic “overheating” preceding the surge in inflation during 2021. Read also: Best Online Brokers for Bonds The former treasury secretary, now a professor at Harvard Univers

To gain an edge, this is what you need to know today. Hotter PPI Please click here for a chart of China ETF Xtrackers Hvst CSI 300 China A-Shs ETF (NYSE:ASHR). Note the following: The Arora Report has been warning you for a while that the worsening relationship between the U.S. and China is a risk that long term, prudent investors need to take into account. Biden has soured the stock market sentiment by calling the Chinese economy a “ticking time bomb.” Biden also called the Communist Party’s leaders “bad folks.” Biden also jabbed China’s President Xi by calling his signature Belt and Road Initiative the “debt and noose.” The chart shows that unlike in the U.S., the AI rally in Ch

On CNBC’s "Halftime Report Final Trades," Joshua Brown of Ritholtz Wealth Management picked iShares U.S. Oil & Gas Exploration & Production ETF (NYSE:PSP), adding that "energy is the next sector to go." Liz Young of BNY Mellon Investment Management named iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) as her final trade. Jim Lebenthal of Cerity Partners named Qualcomm Incorporated (NASDAQ:QCOM), which is due to report quarterly earnings on Aug. 2. See Also: Qualcomm Earnings Preview - Poised To Outperform Despite Chip Excess Concerns, Analyst Predicts Analysts expect Qualcomm to report quarterly earnings at $1.81 per share on revenue of $8.51 billion after the closing bell. St

In a significant market development, the yield on the 10-year U.S. Treasury note surpassed the rate of inflation for the first time in more than three years. With the current yield at 4.04% and inflation recorded at 4% year-on-year in May 2023, this milestone signals a crucial market shift. The difference between Treasury yields and inflation, also known as the real yield or real rate, is a crucial indicator of market risk sentiment. Negative real yields indicate that investing in government bonds results in a loss when accounting for inflation. This typically prompts investors to seek higher returns in riskier assets like stocks, as bonds offer no protection against inflation. How

To gain an edge, this is what you need to know today. AI Driven Disconnect Widens Please click here for a chart of iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF). Note the following: The chart shows that the bond ETF has fallen to the support zone. Bonds move inverse to the yield. The reason IEF has moved down is because yields have risen. This is an important chart because stocks compete with bonds. 10 year Treasury bond yield is the reference benchmark to compare with stocks. In yesterday’s Afternoon Capsule, we shared with you that FOMC minutes were hawkish. Please read yesterday’s Afternoon Capsule for details. ADP is the largest private payroll processor in the coun

Despite calls from many corners that the possibility of a recession has eased, some of the world's biggest bond managers are reportedly sticking to their forecasts for a downturn and advise hedging any bets on risky assets. The bond managers believe 10 consecutive rate hikes by the Federal Reserve have already done the damage while the U.S. banking collapses were a precursor to a bigger crisis as central banks continue to stay hawkish. Also Read: Best Penny Stocks Steve Ellis, global fixed-income chief investment officer at Fidelity International told Bloomberg that something akin to a credit crunch is what he is most concerned about. Central banks' continued tightening shows they'r