August's decline is not the end of the 2023 rally in U.S. stock market.August's decline in stocks was driven by reflation fears and persistently high Treasury yields; but now these two trends are expected to reverse!U.S. core inflation is likely to fall in August, which will reignite disinflationary optimism.U.S. Treasury yields, which spiked in August, are expected to fall in September as economic and inflation data continue to weaken.US stocks are poised to soar in September as data shows a reversal in the trend of reflation fears and Treasury yields. U.S. stocks have risen with great potential in 2023. However, the decline in August once sparked fears of a trend reversal. Currently, it looks like investors were overly concerned. Stocks did pull back about 5% in the f
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A September Rally In U.S. Stocks Will Be Coming!
A September Rally In U.S. Stocks Will Be Coming!
US Treasury Yields Retrace! How to Follow Treasuries on Tiger Trade?
Last night, $S&P 500(.SPX)$ recorded its largest single-day gain in nearly three months. At the same time, yields on various maturities of US Treasuries sharply retreated from their recent highs. Traders in the interest rate markets are betting that the latest signs of a slowdown in the US job market will ease pressure on the Federal Reserve to raise interest rates further this year.Among them, the 2-year Treasury yield fell by 15.2 basis points to 4.905%, the 5-year Treasury yield dropped by 12.2 basis points to 4.282%, the 10-year Treasury yield declined by 8.1 basis points to 4.126%, and the 30-year Treasury yield fell by 4.6 basis points to 4.233%.Data released on Tuesday showed signs of a cooling US economy, indicating that the comprehens
US Treasury Yields Retrace! How to Follow Treasuries on Tiger Trade?
Why Bond Investments Might Be a Safer Bet Than Stocks Right Now
5% risk-free yields from the Treasury are calling our namesImage from CanvaThe only sensible investment for years was in the stock market, as stocks have provided a tremendous annual return since the financial crisis.It became such an accepted thought that the phrase "There Is No Alternative (TINA)" was coined.The other historically popular investment option, bonds, offered terrible returns. Yields were near zero and usually lower than inflation. In some countries, they were even negative.But that has all been changing.Why the Investing Landscape is ChangingGoldman Sachs Group Inc. has dubbed the shift “TARA,” short for “there are reasonable alternatives,” while Deutsche Bank AG has endorsed “TAPAS,” meaning “there are plenty of alternatives,” and Insight Investment has come up with “TIARA
Why Bond Investments Might Be a Safer Bet Than Stocks Right Now
Interest Rate Hikes Continues, What's the Trend for Investment
The Silicon Valley Bank collapsed was caused by too much money and high interest rates. With yesterday Feb CPI data at 6%, Fed is likely to raise interest further +0.25% next week and another +0.25% in May meeting to 5.25%. How many hikes to come and will that impact the market?As US CPI remain high, global equities will continue to be uncertain this year. Investors are now turning their attention to precious metals.Also, find out why precious metals is still an inflationary hedge and also a currency hedge asset, and tips on investing and trading into the gold markets.$Gold - Apr 2023(GC2304)$ $Gold - main 2304(GCmain)$
What Rising Interest Rates Mean for You
5 things on what to do about the highest interest rate in 15 years?In a continued bid to tame decades-high inflation, the central bank may keep pushing rates higher next year, too, albeit at a more modest pace. On Wednesday the Fed Fund rate raised for the seventh time in a row, to a range of 4.25% to 4.5%. That is the highest it’s been in 15 years.That, of course, means higher borrowing costs for consumers. But it also means your savings may actually start earning a little money after years of barely-there interest.Overcoming higher interest rates:• Bank savings: Shop around• Home loans: Lock in fixed rates now• Overall portfolio: Seek broad exposure and pricing power• Some stock plays: Commodities are a good hedge given the uncertainty• For bonds: Go shortThe rea
What Rising Interest Rates Mean for You
The Analysis on 2 November: US Macro Economy
Your morning market bite. US JOLTS report shows a resilient labour market. All eyes on the Fed!Stocks: Wall Street pulled back following some stronger than forecast US economic data. The S&P500 dropped 0.41%, while the NASDAQ shed 1%. Energy and financials were the leaders for the day, while lT, consumer discretionary and communication services lagged. SPI Futures are indicating a 5 point jump for the ASX200 this morning. $NASDAQ(.IXIC)$ $S&P 500(.SPX)$ $S&P/ASX 200(XJO.AU)$Rates/bonds: ISM Manufacturing PMl was slightly stronger than expected, while US JOLTS Job Openi
Uncle Sam is Getting Squeezed with High Borrowing Cost Too
Uncle Sam is getting squeezed by higher borrowing costs of $31 trillion too. Not just the ordinary folks on their home mortgage payment and small business owners on their borrowings. • In 2022 According to CNN, fiscal 2022 alone, the federal government made $475 billion in net interest payments, up from $352 billion the prior year. For context, that’s more than the government spent on veterans’ benefits and transportation – combined. And it’s nearly as much as the $677 billion spent on education. • By 2025 or 2026 Federal interest payments could exceed the country’s entire defense budget, according to Moody’s Analytics. For context, defense spending stood at $767 billion in fiscal 2022. • Conclusion This time compared to 2008 is different. Then inflation at its highest was at 5.5%, today i
Uncle Sam is Getting Squeezed with High Borrowing Cost Too
Analysis on 27 October--US Macro Economy
Your morning bite. A smaller-than-expected BOC hike raises hopes for slower rate hikes globally. Meta's results stink.Stocks: Microsoft and Alphabet earnings weighed on Wall Street last night. Meta's earnings this morning is likely to extend that trend. lt posted weaker than expected results, with EPS coming in below the $1.86 estimate and at $1.64. Revenues declined, and revenue guidance was below expectations. The S&P500 fell 0.7% and the NASDAQ dropped 2.3% in cashtrade. SPI Futures are implying a 26 point lift for the ASX200 this morning. $S&P 500(.SPX)$ $NASDAQ(.IXIC)$
Analysis on 27 October--US Macro Economy
Stocks Soar on Fed Slow Rate Hikes
The Dow has now gained for the past three weeks, its longest weekly winning streak of the year. How long will this rally last?The Fed is likely to raise rates by another 0.75% in November, Fed members are debating whether to signal that a smaller hike could be in the cards in December.Reuters reported the U.S. central bank should avoid putting the economy into an "unforced downturn" by raising interest rates too sharply, and it's time to start talking about slowing the pace of the hikes in borrowing costs, San Francisco Federal Reserve President Mary Daly said on Friday.Make no mistake, a smaller hike does not mean interest rates are coming down at all. At the moment, unlike U.K, at least U.S. CPI not breaking new high is bringing some comfort there:• May 8.5%• Jun 9%• Jul 8.4%• Aug 8.2%•
Stocks Soar on Fed Slow Rate Hikes
Major Bonds Markets: Where Money is Going on
Where the ultra-high net worth, institutional and government’s money flowing to? It seems the China’s bond markets is opposing this trend. All spending or borrowings will come at a price. Being mis-managed, the real danger will be with the continuous rise in interest rates and yet the dollar starts weakening, just like the pound. Not happening now, I am keeping watch on this closely. However, it is not all bad news… More video tutorials, follow my YouTube channel: Invest & Trade with Insight $CN3Y(CN3Y.BOND)$ $CN5Y(CN5Y.BOND)$
Major Bonds Markets: Where Money is Going on
Inflation and Interest Rate Series - Inverted Yield Curve
Today we discussed the relationship between: • Difference between interest rate and yield? • How to tell when Yields are inverted? • Why it is important to note of yield curve inversion? • What is the long-term trend for interest rates and yields Difference between interest rate and yield? i. Interest rates are a benchmark for borrowers and ii. Yields are for lenders. For eg. investors to the U.S. government iii. Both interest rates and yields move in tandem together Why is it important to note yield inversion? "The real winner in rising inflation, USD or Gold?"The real danger will be with the continuous rise in interest rates and yet the dollar starts weakening, just like the pound. Not happening now, I am keeping watch on this closely. More video tutorials, follow by YouTube channel
Inflation and Interest Rate Series - Inverted Yield Curve
Thoughs on Macro Economy& AAPL
Hello everyone, today I want to share some views on macro economy with you.What is a growth recession? The Fed initially target for soft landing, but now to growth recession, why?Throughout 2022, the Federal Reserve has raised interest rates 5 times in an attempt to cool the U.S. economy and reduce inflation. The goal has been to do this without sparking a recession, thereby creating a so-called “soft landing” for the economy.Growth recession is describing an economy that is growing at such a slow pace that more jobs are being lost than are being added. A growth recession does not reach the severity of a true recession, but still involves a rise in unemployment and an economy that is performing below its potential.Why the Fed
Thoughs on Macro Economy& AAPL
Yield Inversion (10y - 2y)
Been holding a futures pair trade (short $Micro 2-Year Yield - main 2209(2YYmain)$,long $Micro 10-Year Yield - main 2209(10Ymain)$). The rationale was 10 year yield should always be higher under Normal circumstances. In statistics world, revert to mean is expected in the long run. The yield Inversion have been up and down same like all other asset classes. The trade has yet to work out to my favour. But it is definitely good personal experience learning about futures product. Next I will look into $Micro WTI Crude Oil - main 2211(MCLmain)$
Yield Inversion (10y - 2y)
What the Bonds Yields show?
All the fixed tenure yields have broken above their four decades of downtrend.To note, the shorter end rate, the fixed 2 year tenure yield is climbing faster than the longer end, the U.S. fixed 30 year tenure government bond yield.How it is going to close in 2022 in this yearly chart, it will be crucial to determine the trend transition; from this long-term downtend to uptrend.More video tutorials, follow by YouTube channel:Invest & Trade with Insight$Micro 10-Year Yield - main 2209(10Ymain)$ $Micro 2-Year Yield - main 2209(2YYmain)$&nbs
What the Bonds Yields show?
Dollar Towering, Stocks Cowering as Fed Hikes Higher
"The chances of a soft landing are likely to diminish to the extent that policy needs to be more restrictive, or restrictive for longer," Fed Chair Jerome PowellThe Fed raised its benchmark rate by 75 basis points on Wednesday, the third such rise in a row, and officials project rates hitting 4.4% this year - higher than markets had priced in before the meeting, 100 bps more than the Fed projected three months ago.Central bank meetings in the Philippines, Indonesia, Switzerland, Britain and Norway are due later in the day with hikes expected everywhere.How has it impacted the market so far?• Dollar rose• Short-dated bonds sold off – Yield curve inverted• Wall Street fell overnight• Extending into Asia sessionThough interest rates should continue to higher both in the short and long-term, a
Dollar Towering, Stocks Cowering as Fed Hikes Higher
Should You Finally Consider Adding Bonds to Your Portfolio?
Drastic times call for drastic measuresPhoto by Ante Hamersmit on UnsplashWe are in “unprecedented” times; a “polycrisis.”A pandemic, war in Ukraine, inflation, supply chain issues, an impending recession, high government debt, rising energy prices, climate issues, and political divide.It may seem like we are facing many issues, but these have been ongoing for months. There’s almost nothing new to discuss.One new topic to discuss is the rising short-term interest rates and falling financial markets.Interest RatesThe Federal Reserve has been raising the benchmark interest rate for the last few months. Since raising rates in March, the Fed has raised rates at each of the following meetings. And they will raise rates at their September meeting (September 20–21); it is widely accepte
Should You Finally Consider Adding Bonds to Your Portfolio?
Yields are Inverted: Why Does it Matter?
How to tell if the yield is inverted? And why it is indicating recession. A quick and simple illustration on:• Difference between interest rate and yield?• Why is it important to note yield inversion?• How to tell when Yields are inverted?1. Difference between interest rate and yield?i. Interest rates are a benchmark for borrowers andii. Yields are for lenders. For eg. investors to the U.S. governmentiii. Both interest rates and yields move in tandem together2. Why is it important to note yield inversion?i. For eg. - when the return on a 30-years yield is lower than the 2-year yield, that indicates a？ii. For lenders or investors – a pessimistic outlook, a reluctance to commit their money to the longer-term bond, they prefer short-term deposits as the market is unclear in the long-term.iii.
Yields are Inverted: Why Does it Matter?
$Micro 2-Year Yield - main 2208(2YYmain)$$Micro 10-Year Yield - main 2208(10Ymain)$$Micro 30-Year Yield - main 2208(30Ymain)$ The yield curve inversion has been a hot topic since it is one of the commonly used indicators to predict recession. One can express their point of view through futures products. Personally I chose the smaller size micros since requiring lesser capital. For e.g. If one believes the inversion will flatten (ie. spread is lesser) , then buy 10y yield product, sell 2y yield product. Note that this is a pair trade. Check out the video from CME. https://youtu.be/Cf0ZHn56cGA
Gold Futures Too Expensive? Learn About Micro Futures
The futures market, especially the gold contract, has been a roller coaster ride lately. In just one day last Thursday, gold fluctuated by nearly $100. Let's take a look at the minimum volatility of $Gold - main 2204(GCmain)$. We can check the contract profile on the Tiger app. The contract unit is 100 troy ounces. The minimum fluctuation unit of the GC contract is 0.1 (USD/oz), equivalent to $10. In other words, when the price goes up or down, you profit or lose at least $10. Let’s take last Thursday’s trend as an example. When GC contract drops from$1976 to$1892, how much would you profit if you short gold? 1976-1892 = 84 84/0.1 * 10 = $8400 On the&n
Gold Futures Too Expensive? Learn About Micro Futures