10Y Treasury yield surged! Rate cut in mid-year?
Affected by lower rate cut expectations, 10Y Treasury yield surpassed 4% on Wednesday.
In December, US retail sales rose by 0.6% compared to the previous month, exceeding estimates of 0.4% and doubling the November increase of 0.3%.
The comprehensive data indicates robust demand of consumption during the holiday season. Many traders have further retreated from betting on rate cut in March.
Analyst from BlackRock commented, "I believe the current data is not sufficient to give the Fed confidence to cut rates in the short term. The rate cut may occur later in the year than in March."
However, the surge also means higher premium of $iShares 20+ Year Treasury Bond ETF(TLT)$ put options.
Would you sell put of TLT during the crash?
How do you view the rate cut? In March or later?
Leave your comments and also post to win tiger coins!
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i guess too early to tell, Fed probably looking at data and deciding if they should cut, pause... I'll be doing the wait and see approach till things are certain...
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Would you sell put of TLT during the crash?
How do you view the rate cut? In March or later?
Leave your comments and also post to win tiger coins!
Nobody has a crystal ball to determine when the rate cut will happen. Maybe the slogan “sell in may and go away, but remember come back in september” might come true. Ie rate cut in May. 😇🤭😂🙏
Anyway, it will happen eventually. Just be patient! 🧘♀️🧘♀️🧘♀️
I am working very high towards my SG dividends KPI then the rate cut. 🤫🫣🤭 Today Tbill is very disappointing 🥺😢😭
Have you pay attention to treasury note? Late last year, investors heaved a sigh of relief. U.S. Treasury yields finally began to decline after a long rally. The yield on the benchmark 10-Year U.S.Treasury Note slid from 5% to below 4%, igniting a ferocious year-end rally in stocks.
With the assumption that Fed Funds rate likely to fall in 2024, it was only natural that Treasury yields would lead the way. In mid-December, the yield on the 10-year note fell below its 200-day moving average (red) for the first time in six months.
Now, the trend has paused, as the 10-year yield has climbed to a one-month high of 4.11%. The yield also climbed back above its 200-day moving average on Wednesday.
While a rise in yields is beneficial to those who live off of interest generated by short-duration fixed income instruments, it's bad news for long-duration bondholders.
It could be bad news for stocks as well. The S&P 500 is trading just below its all-time highs. A failure to break out to new highs, exacerbated by a rise in bond yields, could help to create a double-top pattern on the weekly chart of the S&P 500 (shaded yellow).
For such, I am bearish with the US market in near term $Semiconductor Bull 3X Shares(SOXL)$
How do you think?
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sell a put option, and buy a call at same strike, when you see a bullish uptrend signal.
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December inflation data was Thursday's highlight. The headline Consumer Price Index increased by 0.3% last month, a tenth of a point more than expected. The core CPI, which excludes food and energy components, also rose 0.3% in December. That stretched their year-over-year increases to 3.4% and 3.9%, respectively, both faster than in the 12 months through November.
But the longer-term trend is unchanged, still supporting the overall disinflation, Federal Reserve-pivot theme that investors have been discussing for a while now.
貝萊德分析師評論說：“我認爲目前的數據不足以讓美聯儲有信心在短期內降息。降息可能會在今年晚些時候發生，而不是3月份。”
然而，這一激增也意味着更高的保費$iShares 20年以上國債ETF(TLT)$看跌期權。
Great ariticle, would you like to share it?