Bonds

Ackman's Big Short

Oct 23, 2023 2 min read paid

“There is too much risk in the world to remain short bonds at current long-term rates,” Bill Ackman said in a post on X, formerly known as Twitter, this morning. “We covered our bond short.” He first disclosed his Big Short on August 2 on X, one day after Fitch Ratings downgraded US Treasuries from AAA to AA+, and two days after the Treasury Department announced that the government would

Ed Yardeni

The Forces Of Light Versus The Forces of Darkness

Oct 16, 2023 2 min read

Yin and yang. The forces of darkness appeared in the bond market while light shined in the stock market today. Bond investors would like to see weaker economic indicators to have more confidence that inflation can continue to moderate. The Citigroup Economic Surprise Index remained relatively elevated at 51.8 on Friday (chart). They would also like to see less supply at the Treasury bond auctions, but that isn'

Ed Yardeni

Stocks Ignore The Fog Of War

Oct 11, 2023 2 min read paid

Ed Yardeni

A Sunny Day With Storm Clouds

Oct 10, 2023 2 min read paid

Despite the dark news coming out of the Middle East, today was sunny in the bond and stock markets. It's possible that the latest geopolitical turmoil has caused the 10-year bond yield to fall to 4.65% today from 4.80% at the end of last week, reflecting a flight to safety, which may be giving stocks a lift. However, the dollar index (DXY) and the price of

Ed Yardeni

Fed Officials Calm Troubled Waters

Oct 9, 2023 2 min read

The bond market was closed today for Columbus Day. However, the iShares 20+ Year Treasury Bond ETF (TLT) surged 2.34%. This evening, the 10-year US Treasury bond yield dropped from 4.80% on Friday to 4.65%. The S&P 500 was weak in the morning, but rose 0.63% today (chart). It held its 200-day moving average last week (chart). That's impressive given that oil

Ed Yardeni

Some Good News From The Bond Market

Oct 3, 2023 2 min read

Hurray! The bond market will be closed next Monday for Columbus Day. It has done enough damage in recent weeks. Today, the 10-year Treasury bond yield rose to 4.81% just because job openings edged up in August (chart). Nevertheless, we think the trend is still downward. The same goes for quits. Both are highly correlated with wage inflation as measured by average hourly earnings, which will be reported for

Ed Yardeni

Why Is the Bond Yield Soaring?

Oct 2, 2023 2 min read paid

The latest batch of economic indicators was weaker than expected. On Friday, we learned that real personal consumption expenditures rose just 0.1% during August. The core PCED edged up by only 0.1% during the month. September’s Consumer Sentiment Index fell 1.4 points to 68.1. As a result, the Citigroup Economic Surprise Index (CESI) is down to 47.3% from a recent high of 81.9%

Ed Yardeni

Saudis Have A Vision

Sep 27, 2023 3 min read paid

Saudi Vision 2030 is the vision of Saudi Crown Prince and Prime Minister Mohammed bin Salman (MBS). He wants to diversify the economy of his country. Saudi Arabia’s sovereign wealth fund aims to spend $40 billion a year on the domestic economy—including the construction of Neom, a futuristic city in the desert with an estimated price tag of $500 billion. By some estimates that requires that the price

Ed Yardeni

What Could Go Wrong In September?

Sep 5, 2023 3 min read paid

On Sunday, we observed that September is a good month for picking apples. It is widely viewed as a rotten month for stocks, which has been true during 55% of Septembers since 1928. But those selloffs have often turned out to be good opportunities to pick fallen stocks just in time for a yearend Santa Claus rally. The S&P 500 fell today back towards its 50-day moving average

Ed Yardeni

Bull/Bear Ratios Tank, So Stocks Move Higher

Aug 30, 2023 2 min read paid

The S&P 500 is up 3.2% since last Thursday's close even though Fed Chair Jerome Powell's Jackson Hole speech on Friday was hawkish. Three sectors have outperformed the S&P 500, namely, Information Technology (4.7%), Consumer Discretionary (4.2%), and Communication Services (4.1%). These are the ones that are home to the MegaCap-8, which were boosted by the drop in

Ed Yardeni

The Bond Market's Lines In The Sand

Aug 28, 2023 1 min read paid

Today, the stock market performed better because the bond market performed better. The 10-year US Treasury bond yield remained below 4.25%, which was last year's peak (chart). A few days ago it rose slightly above that rate but didn't follow through to the upside. The same can be said for the 10-year TIPS yield, which backed off from 2.00%. Breakouts above these resistance levels

Ed Yardeni

Bond Yield Returning To Normal

Aug 21, 2023 2 min read paid

The 10-year US Treasury bond yield continued to rise today, yet stock prices rallied led by the MegaCap-8 stocks. The bond yield is returning to the levels seen prior to the period spanning the Great Financial Crisis (GFC) through the Great Virus Crisis (GVC) when the Fed kept interest rates abnormally low. And the stock market might be OK with bond yields returning to their old normal. Nevertheless, there might

Ed Yardeni

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