October 17, 2022 | Daily JAM, Special Reports |
I expect the current Bear Market to go on for a while. To be clear, I’m looking for a bottom in late 2023 or 2024. Either of those dates is still a long way of. And I’m expecting that the bottom, whenever it arrives, will be significantly lower than the 3600 level on the Stanard & Poor’s 500 that has prevailed recently. I hear speculation about 3,000 on the S&P 500. That’s another 20% below the 3600 level. But I don’t expect that we’ll hit that bottom in a straight line. We’ll have significant Bear Market rallies that suck money off the sidelines just in time to catch another leg lower in the market, for example.
Bear Markets seem determined to inflict maximum pain. So it’s extremely important to play good defense. Sell your riskier positions. Take profits, when you have them, when you see signs that a portfolio favorite, even a long-term favorite, is seeing important negative trends in its business. Make sure that the stocks that you’ve decided to hold through the carnage are stocks you really, really believe in: it can be punishing to hold on and hold on, only to lose faith and sell near a low. Build up cash on the sidelines. Find low-risk cash-like positions to use as safe havens as the Bear continues to prowl. But as important as playing defense is in a Bear Market, there’s no reason to abandon altogether the search for profits. Even in a Bear Market, there will be narrow–and probably fleeting–opportunities to make a profit. And that’s what this Special Report is about–finding ways to make money–9 of them in this take–even in THIS Bear Market.
July 8, 2021 | Daily JAM, Short Term, You Might Have Missed |
I’ve read all the headlines explaining today’s drop in stocks, and yesterday’s and the day before. The chaos at OPEC and in oil prices. Fears that the economic recovery is slowing. Thoughts that inflation isn’t a worry and that instead we should fret about deflation. There is some truth to all these explanations. But I don’t see much of the way in news to support a major change in market trend and sentiment. And when I see a big, fast move like that of the last three days or so without much in the way of news to change investors’ view of the world, my thoughts turn to computers and program trades
March 12, 2021 | Daily JAM, Friday Trick or Trend, Mid Term |
The iShares 20+ Year Treasury Bond ETF (TLT) fell 2.12% at the close today to drop into a Bear Market having lost more than 20% from its August high. That’s just in case you needed a reminder of how relentless the selling in the Treasury market has been. At the close at $136.06, the ETF is below the both the 50-day and 200-day moving average. And the Treasury bond ETF is down 13.74% year to date as of the close on March 12. Treasury bonds, even long-dated Treasury bonds aren’t supposed to produce that kind of volatility. Which leads me to the important question: How long does this rout go on and what are the odds of a short-term bounce?
March 1, 2021 | Daily JAM, Short Term |
Treasury yields ended the day slightly lower (which means prices were slightly higher) than earlier in the day. The 5-year Treasury note, for example, ended with a yield of 0.69% after trading with a yield of 0.72% earlier in the day. (The low yield for the day was 0.68%.) The yield on the 2-year Treasury finished at 0.12% and the yield on the 10-year closed at 1.42%, up 2 basis points. At 2 p.m. New York time the yield had been 1.45%. With bonds saying “No worries,” many stock indexes edged up by the end of the day.
June 5, 2019 | Daily JAM, Morning Briefing, Special Reports |
Finally, Part 1 The Crisis in Global Demand, from my Special Report: The Crisis in Global Capitalism and 5 Ways to Position Your Portfolio. On May 29, U.S. stocks took another step lower with the Standard & Poor's 500 closing down 0.69% at 2783. Â News reports on...
January 29, 2018 | Daily JAM, Morning Briefing, Short Term, Volatility |
Last week we saw Treasury bond prices fall and their yields rise on weakness in the U.S. dollar. Today the dollar is stronger–up 0.31% on the Dollar Spot Index–but bond prices have still stumbled and yields on the 10-year Treasury have climbed to 2.7%, the highest level since early 2014.
What seems to be driving this dynamic is fear in the bond markets of end of the week data on the jobs market.
October 29, 2017 | Daily JAM, Friday Trick or Trend, Volatility |
Last week’s drop has again led to the question “So where’s the volatility?” After all it’s not like there aren’t dangers in this world that might lead a trader to bid up the price of protecting against those dangers. It’s certainly not in the VIX, which looks for volatility in the S&P 500 future. But there’s actually plenty out there. It’s just all in the Treasury futures market where traders are hedging their bets on 10-year and 30-year Treasuries big time. The implied volatility in those futures markets has soared in the last couple of weeks.
July 11, 2017 | Daily JAM, Mid Term, Morning Briefing, Volatility, You Might Have Missed |
Today it’s JPMorgan Chase CEO Jamie Dimon telling a conference that the unwinding of central bank bond-buying programs is an unprecedented challenge that may be more disruptive than people think. Tomorrow it’s Federal Reserve chair Janet Yellen giving Congress some clue (maybe) on when the Fed will begin to reduce its $4.5 trillion portfolio of Treasury and mortgage-backed debt instruments.
May 24, 2017 | Daily JAM, Morning Briefing |
The minutes from the Federal Reserve’s May 3 meeting, released today, point to another interest rate increase, the second for 2017, at the central bank’s June 14 meeting. According to the minutes, “most participants judged that if economic information came in about in line with their expectations it would soon be appropriate for the committee to take another step in removing some policy accommodation.”
November 14, 2016 | Daily JAM, Morning Briefing, Short Term |
The rout in global bonds continued today. The yield on the 10-year U.S. Treasury climbed 7 basis points to 2.22%. That’s the highest level since January. Yields on the 10-year German Bund rose to 0.32% in the longest losing streak for these benchmark bonds since May. Yields on Italian and Portuguese debt climbed to the highest levels since July 2015 and June 2016, respectively. The worst damage continued to be suffered in emerging market bonds.
November 11, 2016 | Daily JAM, Morning Briefing, Short Term |
Global bond markets fell to the tune of a more than $1 trillion loss this week after Donald Trump’s win in the U.S. presidential election. The market value of the Bank of America’s Global Broad Market Index, which tracks 24,000 bonds around the world, fell by $1.14 trillion this week. The only other week that witnessed a drop of $1 trillion or more was during the June 2013 “Taper Tantrum” when bonds sold off after then Fed chairman Ben Bernanke threatened to reduce bond purchases.
February 4, 2016 | Daily JAM, Morning Briefing, Volatility |
I argue in Juggling with Knives is that a period of high volatility changes how the market behaves. For example, we can expect correlations among asset classes to come together and then fall apart with increasing rapidity
