Ok, let me know when you get finished with the posting blitz, I have a good stock for you. But I'm not gonna post it while you're doing your morning adhd routine.
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GBA Presents: House of Gummy-!
- Thread starter stonedinvestor
- Start date
The US Federal Reserve’s benchmark interest rate was zero, while central banks in Europe and Asia even ran negative rates to stimulate economic growth after the financial crisis and through the pandemic.
Those days now look to be over and everything from housing to mergers and acquisitions are being upended, especially after 30-year US Treasury bond yields this week punched through 5% for the first time since 2007.
“I struggle to see how the recent yield moves don't increase the risk of an accident somewhere in the financial system given the relatively abrupt end over recent quarters of a near decade and a half where the authorities did everything they could to control yields,” said Jim Reid, a strategist at Deutsche Bank AG. “So, risky times.”
The importance of Treasuries helps to explain why the bond-market move matters to the real world. As the basic risk-free rate, all other investments are benchmarked against them, and as the Treasury yield rises, so that ripples out to broader markets, affecting from everything from car loans to overdrafts to public borrowing and the cost of funding a corporate takeover.
And there’s a lot of debt out there: According to the Institute of International Finance, a record $307 trillion was outstanding in the first half of 2023.
There are lots of reasons for the dramatic bond-market shift, but three stand out.
Economies, especially the US, have proved more robust than anticipated. That, along with the previous dollops of easy money, is keeping the fire lit under inflation, forcing central banks to jack up rates higher than once thought and, more recently, stress that they’ll leave them there for a while. As recession fears have ebbed, the idea that policy makers will have to quickly reverse course – the so-called pivot – is fast losing traction.
Finally, governments issued a lot more debt — at low rates — during the pandemic to safeguard their economies. Now they have to refinance that at a much costlier price, sowing concerns about unsustainable fiscal deficits. Political dysfunction and credit rating downgrades have added to the headwinds.
Put all these together and the price of money has to go up. And this new, higher level portends major changes across the financial system and the economies it feeds. Some money-market funds and even bank deposits are now offering a 5% handle. The German 10-year yield is at the highest since 2011, while even Japan’s is at a level not seen in a decade.
Housing Market Pain
For many consumers, mortgages are the first place that dramatic moves in interest rates really make their presence felt. The UK has been a prime example this year. Many who took advantage of pandemic-era stimulus to take out a cheap deal are now having to refinance, and are facing a shocking jump in their monthly payments.
As a result, transactions are falling and house prices are under pressure. Lenders are also seeing a rise in defaults, with one measure in a Bank of England survey rising in the second quarter to the highest level since the global financial crisis.
The mortgage-cost squeeze is a story playing out everywhere. In the US, the 30-year fixed rate has surpassed 7.5%, compared with about 3% in 2021. That more-than-doubling in rates means that, for a $500,000 mortgage, monthly payments are roughly $1,400 extra.
Government Pressure
Higher rates mean countries have to shell out more to borrow. In some cases, a lot more. In the 11 months through August, the interest bill on US government debt totaled $808 billion, up about $130 billion from the previous year.
That bill will keep going up the longer rates stay elevated. In turn, the government may have to borrow even more, or choose to spend less money elsewhere.
Treasury Secretary Janet Yellen this week said yields are something that’s been on her mind. Adding to the market tensions, the US has been in the throes of yet another political crisis over spending, threatening a government shutdown.
Others are also trying to deal with bloated deficits, partly the result of pandemic stimulus. The UK is looking to limit spending, and some German politicians want to reinstate a ceiling on borrowing known as the debt brake.
Ultimately, as governments try to be more fiscally responsible, or at least give that impression, the burden falls on households. They’re likely to face higher taxes than otherwise along with suffering financially strained public services.
Stock Market Risk
US Treasuries are considered one of the safest investments on the planet, and in the last decade or so the rewards for holding them were modest given suppressed yields. As they now approach the 5% mark, these bonds are looking much more attractive than risker assets, such as stocks.
One metric under close scrutiny is the equity risk premium, the difference between the earnings yield of the S&P 500 index and the 10-year Treasury yield, which is a way of gauging the attractiveness of stocks versus other assets. That stands near zero, the lowest in more than two decades, implying that stock investors aren’t being rewarded for taking on any additional risk.
Ian Lyngen, head of interest-rate strategy at BMO Capital Markets, cautioned on Bloomberg Television this week that if the 10-year hit 5%, that could prove an “inflection point” that triggers a broader selloff in risk assets such as stocks. “That’s the biggest wildcard.”
Those days now look to be over and everything from housing to mergers and acquisitions are being upended, especially after 30-year US Treasury bond yields this week punched through 5% for the first time since 2007.
“I struggle to see how the recent yield moves don't increase the risk of an accident somewhere in the financial system given the relatively abrupt end over recent quarters of a near decade and a half where the authorities did everything they could to control yields,” said Jim Reid, a strategist at Deutsche Bank AG. “So, risky times.”
The importance of Treasuries helps to explain why the bond-market move matters to the real world. As the basic risk-free rate, all other investments are benchmarked against them, and as the Treasury yield rises, so that ripples out to broader markets, affecting from everything from car loans to overdrafts to public borrowing and the cost of funding a corporate takeover.
And there’s a lot of debt out there: According to the Institute of International Finance, a record $307 trillion was outstanding in the first half of 2023.
There are lots of reasons for the dramatic bond-market shift, but three stand out.
Economies, especially the US, have proved more robust than anticipated. That, along with the previous dollops of easy money, is keeping the fire lit under inflation, forcing central banks to jack up rates higher than once thought and, more recently, stress that they’ll leave them there for a while. As recession fears have ebbed, the idea that policy makers will have to quickly reverse course – the so-called pivot – is fast losing traction.
Finally, governments issued a lot more debt — at low rates — during the pandemic to safeguard their economies. Now they have to refinance that at a much costlier price, sowing concerns about unsustainable fiscal deficits. Political dysfunction and credit rating downgrades have added to the headwinds.
Put all these together and the price of money has to go up. And this new, higher level portends major changes across the financial system and the economies it feeds. Some money-market funds and even bank deposits are now offering a 5% handle. The German 10-year yield is at the highest since 2011, while even Japan’s is at a level not seen in a decade.
Housing Market Pain
For many consumers, mortgages are the first place that dramatic moves in interest rates really make their presence felt. The UK has been a prime example this year. Many who took advantage of pandemic-era stimulus to take out a cheap deal are now having to refinance, and are facing a shocking jump in their monthly payments.
As a result, transactions are falling and house prices are under pressure. Lenders are also seeing a rise in defaults, with one measure in a Bank of England survey rising in the second quarter to the highest level since the global financial crisis.
The mortgage-cost squeeze is a story playing out everywhere. In the US, the 30-year fixed rate has surpassed 7.5%, compared with about 3% in 2021. That more-than-doubling in rates means that, for a $500,000 mortgage, monthly payments are roughly $1,400 extra.
Government Pressure
Higher rates mean countries have to shell out more to borrow. In some cases, a lot more. In the 11 months through August, the interest bill on US government debt totaled $808 billion, up about $130 billion from the previous year.
That bill will keep going up the longer rates stay elevated. In turn, the government may have to borrow even more, or choose to spend less money elsewhere.
Treasury Secretary Janet Yellen this week said yields are something that’s been on her mind. Adding to the market tensions, the US has been in the throes of yet another political crisis over spending, threatening a government shutdown.
Others are also trying to deal with bloated deficits, partly the result of pandemic stimulus. The UK is looking to limit spending, and some German politicians want to reinstate a ceiling on borrowing known as the debt brake.
Ultimately, as governments try to be more fiscally responsible, or at least give that impression, the burden falls on households. They’re likely to face higher taxes than otherwise along with suffering financially strained public services.
Stock Market Risk
US Treasuries are considered one of the safest investments on the planet, and in the last decade or so the rewards for holding them were modest given suppressed yields. As they now approach the 5% mark, these bonds are looking much more attractive than risker assets, such as stocks.
One metric under close scrutiny is the equity risk premium, the difference between the earnings yield of the S&P 500 index and the 10-year Treasury yield, which is a way of gauging the attractiveness of stocks versus other assets. That stands near zero, the lowest in more than two decades, implying that stock investors aren’t being rewarded for taking on any additional risk.
Ian Lyngen, head of interest-rate strategy at BMO Capital Markets, cautioned on Bloomberg Television this week that if the 10-year hit 5%, that could prove an “inflection point” that triggers a broader selloff in risk assets such as stocks. “That’s the biggest wildcard.”
2nd company to announce real and significant losses to do cyber activity<-----
MGM sees $100M cybersecurity breach impact
MGM sees $100M cybersecurity breach impact
Good Morning Van! Hey an old friend went up yesterday TOMI!!!! <-------
--Apellis price target raised to $70 from $54 at Citi » 07:00 APLS
--Apellis price target raised to $70 from $54 at Citi » 07:00 APLS
Ok, let me know when you get finished with the posting blitz, I have a good stock for you. But I'm not gonna post it while you're doing your morning adhd routine.
Good Morning Van! Hey an old friend went up yesterday TOMI!!!! <-------
--Apellis price target raised to $70 from $54 at Citi » 07:00 APLS
Here. You'll like this one: https://www.elitetrader.com/et/thre...mpared-to-walmart.374955/page-10#post-5873250
SEAT ---> $6.55
--Mirati Therapeutics price target raised to $82 from $58 at JMP Securities » 06:10 MRTX
--Frontdoor upgraded to Buy from Hold at Truist » 06:07 FTDR
--Kemper upgraded to Overweight from Neutral at Piper Sandler » 05:11 KMPR
--Frontdoor upgraded to Buy from Hold at Truist » 06:07 FTDR
--Kemper upgraded to Overweight from Neutral at Piper Sandler » 05:11 KMPR
Here. You'll like this one: https://www.elitetrader.com/et/thre...mpared-to-walmart.374955/page-10#post-5873250
SEAT ---> $6.55
Is this Vivid seats?
Van take 1/2 position here--
Elastic N.V. (ESTC)
NYSE - Nasdaq Real Time Price.
75.10-0.85(-1.13%)
As of 10:19AM EDT.
Yes it's broken trend or whatever but it is stil above 50 and 200 day
Use $69 area as a mental stop.
Talk to You at noon!
Van I won't get mad I promise. But when I gave you my entry / timed play on ESTC and I noticed it shot up $3 instantly I wondered did you tell Ted? --
Nobody does it better--~ ! And I pretty much think you sold at the bell am I right?
You can tell me now-- I know I see it's down a buck in the pre it won't stay there--
Elastic N.V. (ESTC) $73-----$76 I like to say Up market / Down Market I will always find you the trade~~~~~~~~~~
NYSE - NYSE Delayed Price.
76.13
At close: October 5 04:00PM EDT
THIS IS THE FIFTH STOCK OF THE WEEK IN A ROW TO WORK!
IF YOU TAKE AWAY ONE F* UP ON FLNC WE HAVE A PERFECT RECORD ON STOCKS OF THE WEEK!!!!
IF YOU TAKE AWAY ONE F* UP ON FLNC WE HAVE A PERFECT RECORD ON STOCKS OF THE WEEK!!!!