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Don’t look now. But two key markets that I identified as ready to run are, in fact, doing so. I’m talking about interest rates and select financial stocks.
The yield on the 10-year Treasury Note recently corrected down to the 2.6 percent area from just over 3 percent. But that yield tested and held that key level a few days ago.
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| Interest rates and select financial stocks are ready to run. |
Then last Friday’s relatively strong jobs report caused us to shoot up to a one-month high. We’re now less than a quarter-point from the 3 percent benchmark again.
Five-year note yields are also on the march, recently tagging 1.66 percent. That’s less than 20 basis points from a fresh 32-month high.
We’ll need to see a bit more upside momentum to really scare the latest round of bond buyers. But frankly, I think it’s only a matter of time.
I’ve said again and again that the three-decade-plus bear market in yields is dead and buried … that we’re now facing a multi-year BULL market … and that the recent weakness was nothing more than a great time to sell your bonds at better prices (or to get into rate-sensitive investments that rise in value along with rates). I hope you took advantage of the opportunity you just had.
Speaking of taking advantage of big opportunities, have you seen what some core financial stocks have done in the past several days?
One of my favorite discount brokers – a stock I’ve mentioned in multiple venues, including my interest rate education course – just hit a fresh, five-and-a-half-year high.
Another bank I recently recommended in Safe Money Report just hit its highest level since October 2007!
And still another pair of credit card names I recommended playing in my interest rate trading service hit all-time and multi-week highs, respectively.
Bottom line? The sweeping interest rate mega-trend I’ve been discussing for the past year and a half is not over. Far from it. And it’s creating huge profit opportunities – if you know where to look.
I recommend you get started by signing up with Safe Money right away. That’s where you’ll find specific, actionable recommendations – including details on the bank I mentioned that just hit its highest level since 2007.
Or at the very least, make sure you’ve sold your long-term bonds and bond funds. Then shift money into short-term ETFs, funds, or floating rate notes. Next, consider select financial stocks that actually benefit from rising rates and rising rate volatility – that’s where major profits will be made if I’m right about where the market is heading.
Until next time,
Mike
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
