Aug. 6, 2013, 11:56 AM
- The meme that the 1994 bond market (AGG, BND) selloff won't happen again takes a blow as FRBNY researchers take a look and find this year's decline thus far is tracking 1994's carnage (and 2003's) fairly closely.
- Where the moves differ is in the shape of the yield curve. 1994's rise in long-term yields was accompanied by higher short-term rates (as investors anticipated Fed rate hikes), leading to little-change in the yield curve. In 2013, there's been very little movement at the short-end, meaning investors are simply demanding more yield to hold longer-dated paper.
- Popular Treasury ETFs: TLT, TBT.
- Yield curve ETFs: STPP, FLAT.
- Treasury bull Bill Gross (BOND) is beginning to sound maybe just the slightest bit desperate, tweeting minutes ago: "JOLTS data do NOT validate 200K payroll prints. More like 125K. Taper may be delayed if Yellen has a big vote."
- Today's Jobs Openings and Labor Turnover Survey (JOLTS) is here.
Aug. 1, 2013, 9:07 AM
- The 326K print was the smallest since January 2008, though there is some question as to whether government models are accurately adjusting for the changed nature of summer auto plant shutdowns (some manufacturers completely forego them now).
- The 4-week moving average declines 4.5K to 341,250.
- Treasury prices have no issue with the seasonal adjustment and head south fast, TLT -1.2% premarket and the 10-year yield up 4 bps to 2.64%.
- Stock index futures remain higher by 0.7%.
Jul. 31, 2013, 8:44 AM
- Real personal consumption expenditures +1.8% vs. +2.3% in Q1.
- Nonresidential fixed investment +4.6% vs. -4.6% in Q1.
- Federal government spending -1.5% vs. -8.4% in Q1.
- Price index +0.3% vs. +1.4% in Q1.
- Real final sales (strips out inventory changes) +1.3% vs. +0.2% in Q1.
- Q1 GDP revised down to 1.1% from 1.8% (makes one wonder why they're even looking at today's Q2 estimate).
- Nevertheless, bond prices continue to fall, TLT -1.1%, TBT +2.4% premarket.
- Stock index futures (SPY, DIA, QQQ) remain flat.
- Previous: Q2 GDP +1.7% vs. 1.1% expectations.
- Full report.
Jul. 31, 2013, 8:22 AM| 9 Comments
Jul. 24, 2013, 1:23 PMTreasury prices (TLT -1.6%) add to losses following the 5-year note auction and a pretty middling bid-to-cover ratio. The 10-year yield is up 11 bps to 2.61% in its worst session since the June employment report, and it's starting to take effect on the major stock market averages. The Dow (DIA -0.5%) and the S&P 500 (SPY -0.5%). The Nasdaq 100 (QQQ +0.2%) clings on to a small gain, courtesy of Apple. | 18 Comments
Jul. 21, 2013, 9:51 PM"So bonds (TLT, TBT) come out of their coffin and it's not even Halloween," tweets Bill Gross (BOND). "Bernanke says follow the policy rate and we agree. 2016 tightening at the earliest." Treasurys completed one of their biggest two-week rallies in a year last week as Bernanke assured investors the Fed has not yet decided to begin tapering asset purchases. January 2016 Fed Funds futures are pricing in nearly 100 bps of rate hikes between now and then. | 6 Comments
Jul. 15, 2013, 3:47 PMWith the "tapering genie" out of the bottle, the 10-year U.S. Treasury yield won't go below 2.4% absent a significant weakening in the economy, says BAML U.S. rates strategy chief Priya Misra. The forces keeping rates suppressed over the years - QE, downside growth worry, safe haven demand, bond inflows - are all subsiding. Didn't Jeff Gundlach say a few weeks back, the 10-year rate couldn't go over 2.40%? TLT +0.3% and the 10-year yield is currently 2.55%. | 7 Comments
Jul. 11, 2013, 7:02 AMTreasury yields head south fast following Bernanke's dovish tilt last night, the 10-year off about 10 bps to 2.56%. TLT +1.5% premarket. The 5-year yield (IEI) is back down to 1.4%, off 20 bps since hitting 1.6% last week - a level making little sense with the Fed sitting on a 0% Fed Funds rate for the next 2-3 years. TBT -2.4% premarket. | 14 Comments
Jul. 9, 2013, 1:37 PMA loud treasury bull throws in the towel with David Rosenberg declaring Friday's jobs report a game-changer. The private sector gained 202K jobs last month, making that level the norm for the last 5 months. Against an average of 136K for the 2002-07 cycle and 210K for the 1992-2000 tech boom, it's a pretty fair number. "The case for the Fed's above-consensus forecasts to be met ... looks pretty strong to me." TLT flat today. | 1 Comment
Jul. 8, 2013, 8:10 AMTreasury yields are just starting to go higher, says Goldman, seeing the 10-year as high as 3% by year's end (2.69% at the moment) and 4% by 2016. It's a pretty meek forecast for a team that's been so bearish on Treasurys. TrimTabs notes bond market "carnage" poses big risks for corporate America as oft-noted record cash levels are balanced by record debt levels. Bill Gross remains bullish in the face of sizable losses (BOND) and outflows, tweeting over the weekend, "1-2 month performance numbers are a blip on a 40-year performance history. Pimco marches on a long-term path." TLT +0.3% premarket. | 1 Comment
Jul. 5, 2013, 4:07 PM
Jul. 5, 2013, 8:36 AMTreasury prices crumble following June's strong employment gain. In addition to May's 20K upward revision, April's print was revised higher by 50K to 199K. The 10-year Treasury yield is up to 2.63%. TLT -1.4%, TBT +2.9% premarket. Stock index futures, however, move to new session highs, SPY +1.4%, QQQ +1.2% premarket. | Comment!
Jun. 26, 2013, 8:34 AM
Jun. 25, 2013, 3:38 PM"We're in a highly levered economy where households can't afford to pay much more interest," writes Bill Gross, noting monthly payments on a 30-year mortgage have jumped 20-25% since January and mortgage applications have plummeted 39% in 2 months. He's not buying Bernanke's tough talk given the reality of our economy and the chairman's "helicopter" reputation. "Investors selling Treasurys (TLT, TBT) in anticipation the Fed will ease out of the market might be disappointed." | 28 Comments
Jun. 25, 2013, 12:42 PM
Jun. 24, 2013, 2:55 PMStocks cut a big chunk of their losses and Treasurys turn green as a number of Fed speakers downplay talk of any imminent tightening of monetary policy. Such talk from Dudley and Kocherlakota was to have been expected, but the hawkish Richard Fisher warning the "feral hogs" of the market not to mess with the Fed caught traders' attention. The Dow (DIA -0.4%) now off 55 points, and the 10-year Treasury yield - up as high as 2.66% earlier - falls to 2.52%. TLT +0.8%, TBT -1.7%. | 7 Comments
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