Bonds: 2.332% versus 2.349%.
Bonds rallied for another week, making it to the 50 day SMA and the mid-October high.
Okay, serious resistance here.
Source: Investment House
The less-than-investment-grade sector of the corporate bond market peaked about one month ago. The decline started slowly enough. But it picked up steam last week. And now, high-yield bonds are in free fall.
It’s widely known that the action in the junk bond market tends to lead the action in stocks by anywhere from a couple of days to a couple of weeks.
Technically, it appears there could then be a quick move higher to 2.75 percent.
Bond yields can lure money away from the stock market if they get high enough.
They also could mean higher borrowing costs for U.S. companies.
Jeff Gundlach said that tax cuts could help send them higher, as growth picks up.
Bill Gross declared last week that after more than 25 years, the bond bear market has begun. He noted that key trend lines were broken in the 5-year and 10-year, confirming a bear market.
U.S.-listed corporate bond ETFs are headed for a second consecutive month of outflows, the first time that’s occurred in at least seven years. The pain is across ratings.
Investors pulled more than $1.9 billion from U.S.-listed corporate bond ETFs in the week to Jan. 19, the second consecutive five-day period of outflows.
The average length of bull markets is 25.8 years, but the current bull market is already well past that marker.
In nominal terms, the intensity of the current bull market will soon surpass the top-ranked rally, which stretched from 1441 to 1481.
“Most of the eight previous cyclical ‘real rate depressions’ were eventually disrupted by geopolitical events or catastrophes, with several -- such as the Black Death, the Thirty Years War, or World War Two -- combining both demographic, and geopolitical inflections.”
Joins a rising chorus of voices within China’s circle of policymakers to pare back on the country’s US$1.71 trillion in US Treasuries, the largest hoard in the world.
Return to Other Investment Instruments & Ideas
Users browsing this forum: No registered users and 13 guests