It’s another brutal day for bonds in the early going, with long bond futures plunging almost two-and-a-half-points in price. The yield on the 10-year Treasury Note is jumping 10 basis points to 2.41% as I write. The catalysts for the moves include a potential OPEC deal to cut output, better-than-expected economic data, and ongoing hopes for a more expansionary, inflationary economy under Donald Trump.
So far, the rate surge hasn’t hurt the broader stock market. But interest rate-sensitive assets and investments, such as gold and REITs, are coming under renewed pressure. Bottom line: Continue to follow my long-standing advice, which has been to stay the heck away from radically overvalued, incredibly vulnerable long-term bonds!
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i wonder what a fed rate hike is gonna do? my TMV is doing ok.