How 3% Yields Could Change the Investing Landscape

Rising Treasury yields are “prompting investors to dust off their playbooks for how to trade in an era of relatively higher rates,” according to a recent Bloomberg article. The article cites comments by Jim Paulsen, chief investment strategist at Leuthold Group, who wrote in a client note, “Historically, the stock market has done OK with rising inflation, provided economic momentum was also rising.” Paulsen added that stocks have performed well in moderate economic growth climates… Read More

How Much Longer for This Bull Market?

A recent article in The Wall Street Journal recalls the adage that bull markets don’t die of old age. “Nine years into an extraordinary run for U.S. stocks, it’s easy to buy into the idea that the only things that can halt the market are a recession or the Federal Reserve.” But this statement, it argues, “is only half right,” adding that “with the economy now appearing to be in the last phase of the… Read More

Is There Good News in Rising Bond Yields?

The rise in bond yields since last month’s market correction could be good news for investors, but the challenge comes in identifying the point at which the trend could be bad for shares. This according to a recent article in The Wall Street Journal. Whereas bond investors previously thought that tax cuts would boost inflation, the article says they now seem to be anticipating a better long-term economic outlook with lower inflation expectations. However, it… Read More

Bond Yields Will Probably Stay Low

The bond market continues to cause confusion for experts, writes a Charles Schwab strategist in a recent Barron’s article. Since the end of the recession in 2009, it argues, “consensus expectations have called for higher bond yields and the death of the 35-year bond bull market. Yet, 10-year Treasury yields are now nearly 200 basis points lower than in 2010.” The author opines that, although economic conditions support bond yields above 2%, market expectations are… Read More

Gundlach on Bond Yields and the Broader Market

The market would be hurt if yields on 10-year Treasuries climbed to 3 percent or higher next year, says Jeffrey Gundlach as reported in Bloomberg. The DoubleLine Capital CIO has called president-elect Trump’s policies “bond unfriendly” and says that Treasury yields above 3 percent (benchmark Treasuries are currently trading below 2.5 percent) “would start to have a real impact on market liquidity in corporate bonds and junk bonds.” Gundlach says that he will be looking… Read More

Grant Goes Heavy Metal

If you were to ask Jim Grant, the seasoned and sage founder of Grant’s Interest Rate Observer, where the markets are headed, you wouldn’t hear many minced words. During a recent Barron’s interview, the 70-year old Navy veteran said:  “We’re on the road to an important perception that central bankers don’t have the answers and are in fact in the process of discrediting the very money they are meant to protect.” Grant, founder of the… Read More