There’s an argument to be made, even by me, of a hearty bounce in equities, based on nothing more than this one chart:
Interest-Driven Bounce
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Rate Reversal
Interest rates have been raging higher for months, and last week, looking at TBT, I figured it was time for an easing. So far, this has worked out, since the rates (as expressed by the ultra-short ETF based on TLT, shown below) had come up so far, and so fast. With rates calming down, the NASDAQ has embraced this and, as of this moment, is up about 250 points in a kind of relief rally.
High Yield Leads the Way
This is a look at two ETFs: the granddaddy of them all, SPY (the S&P 500) and the high-yield corporate fund symbol HYG. In normal markets, they pretty much mimic the behavior of the other. As you can see, for many years, they are joined at the hip.
Fed Targets
Of all the “help” the federal government provided last year, perhaps the most distasteful was to have gobbled up ETFs from the good, honest people at Blackstone led by this decent, honest, and generous man. Here are some of the ETFs that the Fed bought with freshly-printed dollars. I offer these as more supporting evidence about how the interest rate world is turning, because they’re all turning south as these interest-sensitive instruments erode. It doesn’t matter that they’re declining. The Fed can always print up more trillions to cover any losses.
Seven Months of Slide
There was a time when the most boring, reliable financial investment around was TLT. I mean, come on, it’s a bond fund. You put your money in and collect your modest interest payment and life goes on. But not anymore. Just look at this – – seven months, and 22% of the value gone. Losing 22% is expected for the likes of Tesla. But – – government bonds?
