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In Current Markets, Only Two Words Matter: Stimulus Spending

Stimulus spending is the theme that continues to defeat every other piece of news. Neither surging virus cases nor political tumult can diminish the...

Bond Market Bears Growling as 1% Is Breached

Whether you know it or not, your life and business are run based on the yield of the 10-year Treasury bond. Rates on mortgages, credit cards, student...

Top 2021 Themes: Horizon Investments’ New Year Special Report

Turning the calendar never felt so good. And with it comes the usual wave of predictions, no matter how badly those predictions turned out for...

PIIGS Fly and Other Stories of Investors Reaching for Risky Bets

Small-cap stocks and other beaten down segments are putting up good performance stats versus the benchmark indexes. The Russell 2000 is higher...

Real Interest Rate Hits All-Time Low

While the real cost of debt has been declining for decades, the U.S. 10-Year Treasury inflation-protected security — or real interest rate — just hit a new all-time low today of -0.89% [Figure 1]. 

Highest Market Volatility Since 1987 as Fed Cuts Rates to Zero

Highest volatility since 1987 Black Monday Crash

After Wild Ride Last Week, Equities Sink on Oil Shock

Last week, global equities ended roughly flat at 0.5% (MXWD) — the smallest week-over-week return since the start of 2020. It sure didn’t feel that way though, with 2-week volatility now in the 50s for the S&P 500 versus mid-single digits at the start of the year. The VIX at 42, Friday’s closing level, seems cheap! Emerging equities (MXEF) led, while International Developed markets (MXEA) trailed, though all three major geographies had roughly the same weekly return. Chinese equities continued their run, up 5.0% last week, but as of Monday’s opening were no longer positive on the year.

Change in 10-Year yield by trading session

The number of the week? 68 bps is the cumulative change in the 10yr U.S. Treasury yield over the past 10 trading days, or since the close of trading on February 21st. During this time, we noticed a pattern: Yields tended to fall during non-U.S. market hours and were flat-to-up during U.S. market hours. In the overnight sessions during this 10-day period, yields fell 73 basis points (bps) and actually rose 5 bps during U.S. hours. As of this writing, it’s worth noting that the 10yr yield fell another 36 bps overnight.

Equities Plummet Amid Whippy Trading as Fed Rate Cut Near Certain

The Big Number: 100% Odds of Fed Rate Cut

100% — that’s the probability of an interest rate cut at the next scheduled Federal Reserve Open Market Committee Meeting on March 17-18, 2019, according to the current market implied rates in Fed Funds futures. As of the close on Friday, there were 1.5 cuts priced into that meeting (about 35 basis points).  

Risk Averse Trading Dominates on Coronavirus and Election Fears

Equities rally amid high consumer optimism, Coronavirus concerns

Markets outside China rise on hopes rate of Coronavirus infection has peaked

Concern over impact of the coronavirus drives markets lower

Markets decline on fears of new coronavirus out of China

U.S. – China trade deal signed; equities hit new highs

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