@theMarket: Bond Yields Weighing on StocksBy Bill Schmick,
03:11PM / Friday, February 24, 2023 | |
There is a discrepancy growing between bond and stock markets. The bond vigilantes are betting the Fed is nowhere near done hiking rates. Stock jockeys disagree. Which camp will prove correct?
A look at the government's U.S. Treasury bond auctions this week resulted in most yields going higher. Buyers insisted on higher returns to purchase the billions of dollars in U.S. Treasury notes, bills, and bonds that are a weekly occurrence in the financial markets.
Overall sentiment in the markets has turned cautious and, for some, downright bearish once again after the January rally in stocks. Recession fears are once again taking center stage for many although 0 Comments
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The Retired Investor: U.S. Treasuries Beginning to Look Attractive.By Bill Schmick,
04:40PM / Thursday, February 23, 2023 | |
It may not be the 1970s when interest rates offered investors double-digit returns, but 5 percent on a six-month U.S. Treasury bill isn't bad.
We last saw that kind of return in 2007. To be sure, the rate still comes up short when compared to the 6.4 percent annual rate of inflation right now. Yet inflation is declining and has fallen for seven months in a row.
The dilemma investors faced last year was that there simply was no haven to park their cash. The stock market was treacherous and falling. The Federal Reserve Bank was hiking interest rates on an almost monthly basis to combat inflation, and most bond prices were falling almost as much as 1 CommentRead More >> |
@theMarket: Stocks Working Off Some SteamBy Bill Schmick,
03:59PM / Friday, February 17, 2023 | |
It has been a week of consolidation. A string of downside negative surprises has kept the markets in check but has failed to break anything. Given the macroeconomic data, that has been impressive.
Both the monthly Consumer Price Index (CPI) and the Producer Price Index (PPI) came in hotter than expected. The monthly CPI rose 0.5 percent, and the PPI came in at 0.7 percent. That spooked investors since higher inflation means the Fed will likely keep interest rates higher for longer. Yet, dip buyers took advantage of the declines and bid markets back up.
In addition, retail sales for January were almost double the average estimate, coming in at a 3 percent 0 Comments
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The Retired Investor: The Debt Ceiling DramaBy Bill Schmick,
04:39PM / Thursday, February 16, 2023 | |
In a few months, be prepared for politicians of both parties to turn up the heat as the June debt ceiling deadline approaches. Normally, the stock market responds with increased volatility. The question is should investors pay attention at all?
That may sound like heresy given that we are talking about the full faith and credit of the United States of America. If the government defaults on its debt, the global repercussions of such an event would be momentous. Currencies would plummet, stocks would crash, and interest rates would soar. Armageddon would reign, or at least that's what is predicted to happen, but no one knows for sure because the U.S. has never defaulted 0 Comments
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@theMarket: Markets Consolidating After January GainsBy Bill Schmick,
04:07PM / Friday, February 10, 2023 | |
They say you can't keep a good market down. That is proving to be the case thus far in 2023. Every dip continues to be bought and the technical charts indicate there may be more upside ahead.
I was expecting that January's bounce in the averages would reverse in February. So far, I have been wrong. I did provide some caveats. For example, I recognized that my forecast had become the consensus view, and that made me uncomfortable. I also wrote back at the end of January that if the Fed moved into a more dovish stance "my prediction fails to materialize, and the market continues to grind higher, we could ultimately see 4,370 on the S&P 500 Index, which is 0 Comments
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