Tuesday, April 23, 2024
One of the most popular finance games when the New Year comes around is to make forecasts about the upcoming year. Most predictions don’t come to pass—the future is just too darn fickle. However, it is the start of a new year, so I, too, will take a shot at some predictions. Because some things […]
Volatility has ruled the stock market since the 2021 bull market ended at the start of 2022. Stocks made a nice run during the first half of 2023 but have turned down into correction territory since the end of July. The recent decline in stock prices is tied to rising yields in the bond market. […]
In the past year and a half or so, there’s been lots of talk about the U.S. yield curve essentially inverting. So today, I wanted to make a couple of important points about it that’s important for you to see. As you know, the yield curve visually depicts how bond maturity dates and interest rates […]
“Don’t fight the Fed.” Famed fund manager Marty Zweig came up with that one in 1970 and repeated it religiously until he passed away in 2013. The Federal Reserve has been raising rates since March of 2022, and Fed funds rates have gone from 0.25% to more than 5%. Three-month Treasury yields have risen from […]
Last week, the Federal Reserve decided to pause its rate hiking efforts to slow down inflation.Fed Chair Jerome Powell made it clear that the central bank is not done fighting inflation yet, and that this is just a brief pause to allow the committee to observe how the rate hikes impact the economy.From where I […]
I have said it before, and I will say it again: I am not a huge fan of the broader market at these levels. While the recent banking turmoil has raised the possibility that the Federal Reserve would cut rates soon, I think we have a better chance of the Cincinnati Reds winning the World […]
The U.S. economy will likely experience a recession this year. We may already be in one. I believe the 2023 slowdown will be significantly different compared to recent economic contractions. Memorable recessions are usually associated with a larger financial crisis, such as the bursting of the dotcom bubble or out-of-control subprime mortgage lending, such as […]
Interest rates have been the focus on 2023 so far (to the surprise of no one). One way to trade interest rates is by using ProShares Ultrashort 20+ Year Treasury Bond ETF (TBT). TBT moves with the direction of rates (yields) and opposite the direction of bond prices. With rates the highest they’ve been in […]
Last week the U.S. stock market experienced its biggest one-day decline in several years. A rapid yield increase on the 10-year Treasury note triggered the stock market route. The market runup in January was due to investor expectations that the Federal Reserve would soon start to ease interest rates.February reversed that enthusiasm, and the stock […]
New Year is in just a couple days. We spent Christmas in my house noisily with one of my two granddaughters in attendance, with a prime rib roasting away. As is tradition, my wife had the TV tuned to a station that plays seasonal tones while the screen is filled with a roaring fireplace. Now […]
