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Bond Market Reacts to Nonfarm and FedBonds fell again, hitting our next target at 115'29. Yields are creeping up as the markets are pricing in the next rate hike, expected to be 50-75 bps . Nonfarm payrolls gave us some insight into economic conditions: unemployment rose to 3.7%, with a headline miss and downward revision. This suggests that the economy is weakening further, and we are in a period of stagflation. Yields subsequently weakened and we are seeing a slight pivot off 1529. If we rally, we could hit 116'20 or even 117'08. If the figures are hotter than expected it should bolster the Fed's hawkish rhetoric and we could break through 115'29, to 115'03.
CBOT:ZN1!Short
by quantguy
Entering the ER months - SPY USOIL WEAT BONDS GOLD DXY BTCSeptember 1 and that fall reversal may be in the air. Looking for a reversal from the falling wedge, but believe me it could easily end up as a false breakout. I'm sure many eyes are on it at this point. If we do rally from here, is it a minor rally? If so, we may set up another, larger, head and shoulders pattern. OIL is at support, Bonds are sucking and probably go into the 120's even if they bounce. Wheat futures / ETF at support as well. Gold needs to hold 1675 level but the Dollar is very strong long term. The USD may pull back here though. BTC is holding up well. Tomorrow at 8:30 is Jobless claims and then ism at 10am, you can watch for economic news on this nice economic calendar us.econoday.com
AMEX:SPYLong
by the_sunship
1
TLT Bond ETF Setup for Reversal to LONGNASDAQ:TLT On the 4H Chart, TLT is sitting on minor support with major support below that. It is near to the bottom of open Bollinger Bands and is inclined to move through the basis line closer to the upper band. Significant resistance is 5 and 15% upside. I see a swing long trade with the stop loss below the major support and targets before the major resistances, yielding a very good reward for risk. Call options are another possibility to consider.
NASDAQ:TLTLong
by AwesomeAvani
ES - 1 Hour / Pivotal Timeframe - BONDS DivergingWE REMAIN IN A BEAR MARKET, regardless of the Retracement. The 50SMA is 35 handles below the 200SMA. Bullish? Definetely not. That said, the Riggers on the Trigger will continue to bleed out every last cent prior to the next sudden and very sharp decline. For now they have the Ball, but "Inflation is at Zero" from the Admin has found new heights of perceptuion management - Absurdity. _________________________________________________________________________ After the 199 EMA tag n' bag, a defensive retracement on Profit taking. Under the hood, the Volumes continue to decline, Retailers continue to add Puts citing the VIX @ Lows. Dr. Bury, deep drawdown on Scion's Puts. FOMO on the FED Pivot has hit 92% Sentiment for Bulls, room to run as the horror show can extend and pretend for a few more weeks. Extreme Greed is in trade. Twitter is filled with the usual Buzz Lightyear overreach, "Infinity~!" While MBS remains - NO BID and Defaults are rising rapidly. Bond Auctions - 379 Failures. _________________________________________________________________________ Insiders buying on Share Buy Backs, Insts peeling it off ever so slowly. Unfortunately, Retail Put buying is back to FOMO as well - a large short term cross-current. It appears to be a Distribution phase into a Range... where is the range? That will depend on today's response to the FOMC's Meeting Minutes. A larger Pullback is due, there are 7 Gaps below, how will today and Friday's expiry trade out? High Probability - ranging to wreck Retail's Bearish positioning with an expanded range now that 4337 was front run for SEP, DEC blew right thru this level. Apple's Gap @ 175 wants a fill, Tesla is a mental patient once again, seeking 1030 to 1050 in the break - this implies the 4337 may give way to a higher high into the pivot for time, AUG 22nd to SEP 4th/5th. _________________________________________________________________________ Slop, Chop, Pop & Drop - the RANGE. To Distro more Junk & Co. _________________________________________________________________________ Bonds are not buying it... as they are watching the inversion with disbelief as China begins "enhanced lockdowns" and Global Economic activity implodes... yeah, naw, they are calling Bullsh_t. Inversion is 12 Bips away on the 1's - 2's on out to 5's checkmate - Inverted and although they are ranging between 32 and 48 Bips... it is 100% persistent. HGY - Denegerate disbelief, Bonds should not, in any way be acting as they are were this a Bull Market or New Bull Market... it tales time to assert reality. It takes time to Distro off all the Junk bought near the lows to be re-liquified at a time when Liquidity is simply evaporating due to the crushing load of debt, both public and private from all corners. Housing Starts were another disaster, retail sales - with Back to School may shows signs of hope, false hope, but hope none the less, we shall see how the Cooks in the Kitchen serve it up. _________________________________________________________________________ RTY / ES / NQ / YM made extreme moves off the June 16th Pivot. Today, we'll find out whether we consolidate in an expanding range or simply run through resistance to higher levels - A rally no one understands, but FOMO Degens do not care. September is ahead, statistically - the worst month of the year. Funda's are not driving Junk & Co, greed and fear are. Mo $, Fear of Mo $ miss. _________________________________________________________________________ In SUM, it's a dangerous Joke of an Equity Complex that will do far more harm. Hyper BK Junk BBY, GME, AMC, COIN all finding Uber Luv. We've seen this time and again and the ending... the song remains the same. _________________________________________________________________________ Extreme Patience remains the stock in trade. NQ Summation and OSC's are getting squeezed to extremes once again, point critical has arrived. The 2 Year (2YY Futures) will define the Pivot, where the Fed has a modicum of control on the Curve. TLT appears to be an "M" for Murder and not a New Bull Market, it can RT to 130, but given the recent performance, that trade is growing long on hope, faith and success. The DX is at a super critical level - with Eurodollar Futures GED.X cranking back down, somethings going to Snap. A great deal hinges on Crude Oil - 85 to 77 to 64 is the implied lower range over time... awhile. Oil tends to lead the declines in Bear Markets as Utilities, Healthcare and Bonds are the rotation on schedule. _________________________________________________________________________ RESISTANCE AHEAD OF NEWS is where we are.
CME_MINI:ES1!
by HK_L61
3
Why Corporate Bonds are not a good option for Retail InvestorsCorporate bonds or tradeable debt instruments issued by corporations are a type of fixed income security. Given the recent media attention and the rising demand for fixed income investments among retail investors, it may come as a surprise that they are not suitable for all investors. Corporate bonds have different risks associated with them than other fixed income investments like savings accounts, money market funds, and even municipal bonds. If you are considering investing in corporate bonds or are already holding some in your portfolio, here is why you should avoid them as a retail investor What is a Corporate Bond? A corporate bond is a debt instrument issued by a corporation to raise money. Corporate bonds typically have a set maturity date after which the outstanding principal will be repaid. There are many kinds of corporate bonds, including investment grade and high yield, government and non-government, and they can be issued in local or foreign currencies. Corporate bonds are often traded on the secondary market, which means they are liquid and can be bought and sold easily. Investors earn a return on corporate bonds by receiving interest payments and by the increase in the bond’s value as it matures. The interest rate on a corporate bond is based on factors like the company’s credit rating, the length of time the bond is outstanding, and the bond yield in the market at that time. Corporate bonds are typically less liquid than stocks, and may have shorter holding periods, especially if you purchase them on the secondary market. Risks of investing in Corporate Bonds Corporate bonds are considered a form of debt financing, and as such, there are risks associated with holding them. The main ones are default, liquidity, and interest rate risk. - Default risk - Investing in corporate bonds entails the risk that the issuing company will default on the payment of interest or the repayment of principal. However, since corporate bonds are issued by companies in different industries, there is a low probability that they will all default at the same time. - Liquidity risk - The risk that you will not be able to sell the investment in a timely fashion at a price that is attractive to you. - Interest rate risk - The risk that if you hold the investment until maturity, you will earn a lower rate of return because interest rates will have risen in the meantime. Why you should avoid Corporate Bonds as a Retail Investor While corporate bonds may be suitable for institutional investors, they are not a good option for the average retail investor. For one, you will have to educate yourself on the various types of corporate bonds, their risks and returns, and what kind of companies you should be investing in. Even if you are successful at taking this on, you are likely to end up with a very concentrated portfolio, which brings us to the next problem. The other issue is that retail investors typically hold a small number of bonds and these bonds are often concentrated in a few issuers. This is not a good strategy because if a company defaults, you could lose a large portion of your capital. This is clearly a bad strategy. So, How about Investment grade debt ETFs? LQD, In a rising interest-rate scenario. The bonds' tenure is clearly working against them, especially since unemployment continues to fall at an astonishing rate. This is not the time to invest in this ETF if the Fed raises interest rates to combat inflation. In order to completely comprehend this analysis we must know how important the duration is, while investing in bonds. Duration is an important topic. It is the bond's effective maturity, which means it is oriented to something lesser than the time of the bond's final payment since part of the bond's value, generally from coupons, happens earlier in the bond's existence. If a bond has a longer effective maturity at a fixed interest rate, it indicates that investors are tied to an interest rate that was once market for a longer period of time, and if rates increase as they are currently, you will be bound to an uneconomical rate for a longer period of time. Simply put, longer term bonds lose value more severely when interest rates increase. How maturity of a these bonds (Duration) is affecting LQD Unemployment has gone down despite the increased rates, which has surprised many analysts. The Phillips Curve is back in force, where low unemployment yields high inflation if inflation is kept down, and contrary to common perception, Consumer spending has declined, but unemployment is so low that it might rise again unless the Federal Reserve, which is committed to lowering inflation, continues its anti-inflation campaign. The Federal Reserve has raised rates as well as given gloomy recession predictions, and more banks are following its lead, including the Bank of England. LQD, which has dropped 14% this year, have long-duration bonds, majority of fixed-rate, which is concering for this ETF. Credit Spread Global Cooperate Bonds in general Corporate bonds continuing their strong performance in July, producing $80 million (+76% year on year).  July was the most profitable month of the year for CBs . Their  revenues in 2022 have exceeded from 2021 ($512 million). Average balances increased by 9.8% year on year, average costs increased by 59% year on year, and usage have increased by 27% year on year. Spreads on non-investment grade and high yield bonds continue to widen as corporate prospects deteriorate owing to weakening consumer demand and stricter financial conditions. In-turns , asset values fall, yields rises, and borrower demand increases. However, CG Debt funds have seen the highest monthly outflows in May and June (-$73.7 billion) In July, High Yield Bonds enjoyed the relieve rally. Interest rates vs Corporate Bonds comparison Alternatives to Corporate Bonds for retail investors For retail investors, the most advisable option is to go with government bonds. Government bonds have historically offered a lower risk profile compared to corporate bonds. The best way to go about investing in government bonds is to go for a diversified bond fund. Using a bond fund reduces the risk associated with investing in bonds further as the fund manager may hold a large number of different bonds. If you are looking at a short-term investment horizon (less than 10 years), then you could also opt for short-term government bonds. If you have a long-term horizon, then you could consider a long-term government bond fund. Savings accounts, money market funds, and short-term government bonds are very liquid forms of low risk investment options. Conclusion It is important to understand that the corporate bond market is not risk-free. When interest rates are rising, corporate bonds are generally falling in price as they are competing against government bonds with lower interest rates. In times of economic uncertainty or when interest rates are rising, the risk of default is generally higher for companies issuing corporate bonds. Thus, it is advisable to invest in corporate bonds only when the economy is growing steadily. For retail investors, the best options are to go with government bonds or short-term government bonds. These are low risk, liquid investments and will help you achieve your financial goals.
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AMEX:LQDEducation
by EQTSHARES
12