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Bonds & Interest Rates

Long-Term Interest Rates & The Macro Plan

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Posted by NFTRH

on Friday, 24 November 2017 06:45

Folks, the ‘yield’s rising to the limiters’ near-term plan has been frustrating. Not for my own investment and trading because I’ve stayed balanced with a focus on interest rate  neutral sectors, but because it makes so much sense within the context of several different macro items that could one day come together to form a massive macro fundamental sell signal on the stock market.

Those components are for stocks to finish outperforming vs. gold, 10 & 30yr yields to rise to 2.9% & 3.3% (+/-), respectively and for the yield curve to make a low. Thing 2 seemed like it was engaging when the daily 10 & 30yr yield charts made bottoming patterns and Things 1 & 3 are in process but could still have quite a way to go.

A couple days ago I affixed my tin foil hat and speculated about the coming of Operation Twist by another name and method. Who knows whether or not the bond market is factoring any of that in yet but taken at face value, its implication would hinder long-term yields and while it serves to keep the macro nice and bullish with a flattening yield curve, it would at least drive the curve down toward future resolution.

Here again are the big picture components. By all views there appears a playable amount of upside left in risk ‘on’ items, especially stocks. The graphic has aged a couple weeks and the yield curve has actually dropped further, but you get the picture.

3amigos-1

 

....for more charts and analysis go HERE

....also from NFTRH:

EXCERPT ON MEDICAL DEVICES



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Bonds & Interest Rates

Credit Bubble Bulletin: Chronicling History's Greatest Financial Bubble

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Posted by Credit Bubble Bulletin

on Friday, 17 November 2017 07:13

debt-bubbleIt’s been awhile since I’ve used this terminology. But global markets this week recalled the old “Bubble in Search of a Pin.” It’s too early of course to call an end to the great global financial Bubble. But suddenly, right when everything looked so wonderful, there are indication of "Money" on the Move. And the issues appears to go beyond delays in implementing U.S. corporate tax cuts.

The S&P500 declined only 0.2%, ending eight consecutive weekly gains. But the more dramatic moves were elsewhere. Big European equities rallies reversed abruptly. Germany’s DAX index traded up to an all-time high 13,526 in early Tuesday trading before reversing course and sinking 2.9% to end the week at 13,127. France’s CAC40 index opened Tuesday at the high since January 2008, only to reverse and close the week down 2.5%. Italy’s MIB Index traded as high as 23,133 Tuesday before sinking 2.5% to end the week at 22,561. Similarly, Spain’s IBEX index rose to 10,376 and then dropped 2.7% to close Friday’s session at 10,093.

Having risen better than 20% since early September, Japanese equities have been in speculative blow-off mode. After trading to a 26-year high of 23,382 inter-day on Thursday, Japan’s Nikkei 225 index sank as much as 859 points, or 3.6%, in afternoon trading. The dollar/yen rose to an eight-month high 114.73 Monday and then ended the week lower at 113.53.  From Tokyo to New York, banks were hammered this week.

Perhaps the more important developments of the week unfolded in fixed-income.

....continue reading HERE



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Bonds & Interest Rates

Prepare For Interest Rate Rises And Global Debt Bubble Collapse

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Posted by GoldCore

on Monday, 13 November 2017 06:12

– Diversify, rebalance investments and prepare for interest rate rises
– UK launches inquiry into household finances as £200bn debt pile looms
– Centuries of data forewarn of rapid reversal from ultra low interest rates
– 700-year average real interest rate is 4.78% (must see chart)
– Massive global debt bubble – over $217 trillion (see table)
– Global debt levels are building up to a gigantic tidal wave
– Move to safe haven higher ground from coming tidal wave

Editor: Mark O’Byrne

risk-free-rate-1

Source: Bloomberg

Last week, the Bank of England opted to increase interest rates for the first time in a decade. Since then alerts have been coming thick and fast for Britons warning them to prepare for some tough financial times ahead.

The UK government has launched an inquiry into household debt levels amid concerns of the impact of the Bank of England’s decision to raise rates. The tiny 0.25% rise means households on variable interest rate mortgages are expected to face about £1.8bn in additional interest payments whilst £465m more will be owed on the likes of credit cards, car loans and overdrafts.

The 0.25% rise is arguably not much given it comes against backdrop of record low rates and will have virtually no impact on any other rate. However it comes at a time of high domestic debt levels, no real wage growth and a global debt level of over $217 trillion.

....continue reading HERE



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Bonds & Interest Rates

Bond Bears And Why Rates Won't Rise

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Posted by Lance Roberts via Seeking Alpha

on Friday, 10 November 2017 06:52

saupload Rates-10-2-Yield-Spread-110817

Here we go again…

Since June of 2013, I have been writing about the reasons why rates can’t rise much and why calls for the end of the “bond bull market” remain wrong.

Regardless, about every 3 months or so, there is a tick up in rates and you can almost bet that soon thereafter will be a litany of articles explaining why THIS time the “bond bull market” is really dead. For example, just from this past week:

 

 

What is the argument from low rates will rise?

It basically boils down to simply this – rates are so low they MUST go up.

The problem, however....

.....continue reading HERE

 

...also from Seeking Alpha:

Energy Stocks - Relative Performance Breakout Watch



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Bonds & Interest Rates

10YR Treasury Note & Its Yield

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Posted by NFTRH

on Wednesday, 08 November 2017 06:44

I am staying patient on this not only because the daily charts have not completely given up the rising yields play, but also because the monthly charts still look poised for it (and a decline in bonds).

The post-FOMC period has been somewhat annoying as often seems to be the case. I’ve been trying my best to be balanced until the view clears as the robots running this market grind their gears. It’s one of those phases I wish I were a day trader not at all caring what the macro signals are. But alas…

Here we have the T note having inched out of a bear flag and the yield having inched up from a bull flag. These are being tested now.

ust

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