giftedviz.com
giftedviz.com September 23, 2018


Treasurys are surging as stocks get slammed

12 February 2018, 12:19 | Darnell Patrick

Treasurys are surging as stocks get slammed

Treasurys are surging as stocks get slammed

"If we see 3.0 percent next week that is going to spook people more - the equity market psyche is fragile at this point".

And it's now in a correction - 10% off its record high just two weeks ago.

US stocks began to wobble last Friday after a healthy USA labor market report sparked a spike in bond yields and fears of rising inflation.

The Dow finished with a decline of 1,033 points, the second-worst in history, eclipsed only by Monday's 1,175-point plunge.

"It's not going to be a two-day phenomenon", he added.

"To some extent, this will put an end to that", said Jim Caron, Morgan Stanley Investment Management fixed income portfolio manager.

Volatility's grip on global markets tightened Thursday as surging Treasury yields renewed concern that higher rates will drag on the economy and pushed USA stocks lower for the fourth time in five days.

"Over the last half a dozen of years we have been saying equity valuations can be higher because we are living in a low interest rate and low inflation environment but that's reversing a little bit and that's what we are staring at now", said Art Hogan, chief market strategist at B. Riley FBR in NY. "The larger auctions in the coming quarters will tell the story", said David Ader, chief market strategist for Informa Intelligence, in a note. We haven't had inflation, and now we have it and everyone freaks out. And swings in bond prices are likely to become more common than in recent years, when returns were unusually smooth, experts say.

On Friday, New York's Dow closed down 666 points, with the S&P and Nasdaq also down sharply.

At the same time, higher interest rates can make investment alternatives to stocks, such as bonds, more attractive. Friday's trading saw an 849-point trading range for the Dow. That compares with 22.6 times profits for the S&P 500. That only happened eight times all of past year, the fewest since 1964, according to LPL.

The next big test for the bond and stock markets could be on Valentine's Day, when the government releases its next monthly update on inflation. But it certainly prompts central banks to take monetary action, which reduces liquidity in the system. But such calm is unusual, and stocks overheated.

Wendy Williams Dubs Meghan Markle 'Random Princess'
And, that's when the talk show host admitted, "She applied for a job here too, yeah". She is also said to have introduced Meghan to a number of friends in London.


Demoentisation And GST is Result of PM Modi's Backward Thought: Rahul Gandhi
In his speech, the chief accused the BJP-led central government of failing to deliver on its polls promise of generating jobs. If Bangalore is standing on its own legs today, then it is HAL that has contributed to the city's development.


Ghanaian music star, Ebony Reigns, dies in vehicle crash
Ebony's passing comes on the back of a stellar 2017 where she rose to superstardom in Ghanaian popular culture. Ebony died Thursday evening in a heavy traffic accident on Sunyani-Kumasi Road.


Wall Street has enjoyed a record-breaking run ever since Trump's 2016 election on hopes of a beneficial impact from the USA president's pro-business tax-cutting policies. "There was euphoria because there hadn't been a pullback", said Jeffrey Schulze, investment strategist at ClearBridge Investments. The German 10-year yield, Europe's benchmark, climbed to its highest level since late 2015.

"You are beginning to see the edge taken off the USA economy as capacity has disappeared", Warner said. But it also had a negative impact on the bond market and resulted in forecasts of more Treasury supply and higher $1 trillion deficits.

"The primary culprit was higher-than-expected wage growth in the January jobs report, which may have increased fears that the Federal Reserve would be more aggressive with interest rate hikes in 2018", according to LPL.

Dudley, who called the market slump "small potatoes", said the "jury is still out" on the number of rate hikes.

The Bank of Russian Federation is set to hold a rates decision Friday, with most economists forecasting a cut. The U.S. Senate reached a bipartisan deal Wednesday that would boost spending limits by $300 billion over the next two years.

Wall Street anticipates that more government spending will force the Treasury Department to borrow more money by selling additional bonds.

So investors should be anxious about higher interest rates, just not yet.

"With expectations running high, we think the sell-off may have further to run and we reduced our exposure to equities in our multi-asset funds on 29 January, although we still remain overweight stocks", Greetham added. The leak of a Federal Bureau of Investigation memo on Trump's Russian Federation "dossier" complied by a British ex-MI6 intelligence officer has also unnerved stock market bulls about rising political risk in Washington.

Patterson explains the relevance of America's long-standing strong dollar policy to the Fed's ability to support the economy - and the risks of its abandonment by the Trump administration.

Equity investors are anxious the likelihood of a stronger USA economy and higher inflation could lead the Federal Reserve to boost interest rates more times than previously anticipated.

"The U.S. economy is on solid foundation", said ClearBridge's Schulze.



Other News

Trending Now

Analyst's Predictions on Exxon Mobil Corporation (XOM), Sirius XM Holdings Inc. (SIRI)
Matarin Capital Management Llc is a Connecticut-based institutional investor with more than $198.00 million AUM in April, 2014. It has outperformed by 42.73% the S&P500. ( XOM ) by 5.97% based on its latest 2017Q3 regulatory filing with the SEC.

American Gerard wins men's snowboard slopestyle at PyeongChang Olympics
Ontario's Tyler Nicholson finished seventh with a best score of 76.41, while Quebecer Sebastien Toutant finished 11th with a best of 61.08.

Dow drops by more than 1000 points twice in week
He has denied the accusations but said he could not be effective in his corporate positions in the face of those allegations. The Dow moved almost 500 points during trading on Wednesday before closing down 19 points, or 0.08 per cent, at 24,893.

Mourinho relishing return to 'Mr Robson's home'
When asked why he thought Mourinho had sold him, Mata replied: "I think it was a football reason, style, something like this". When Manchester United and Newcastle met earlier this season at Old Trafford , the men in red easily took all three points.

Why Entrepreneurs Carry Business Cards
You will have to wait for them to visit your website or store later and this can mean they’ve already forgotten about you. If you succeed in creating a memorable business card, you don’t just connect deeper with the person you gave the card to.

Former Penn State football coach Tom Bradley hired by Steelers
He told PennLive this past season that he does not want to give up coaching Pittsburgh's current core of defensive line talent. Knowing Coach Mitchell, who was a coach at LSU when I played.

Cubs, Darvish agree to 6-year deal
His 2017 season showed a slight decline from seasons past, both in Texas and then, after a mid-summer trade, in Los Angeles. He dominated the Cubs in the NLCS, pitching into the seventh and allowing just one run in his lone start in the series.

Israeli fighter jet crashes under Syrian fire, says military
Israel's leading daily Haaretz reports that Syrian anti-aircraft missiles targeted an Israeli F-16, prompting the pilots to eject. Iranian and Iran-backed Shi'ite forces, including Lebanon's Hezbollah, have deployed widely in support of Assad.

INQUIRING REPORTER: Should Alberta boycott BC wine?
The Alberta government isn't aiming its anger at multinational corporations with shareholders, Prodan said. He maintains his focus right now is on this month's budget.

Joaquin Phoenix circling The Joker role in origins film
The Gladiator star, 43, is Phillips' top choice for the role in his DC movie, which will be produced by Martin Scorsese . Joaquin Phoenix is reportedly in talks to play iconic DC Comics villain The Joker in a standalone film.