Posted on 02/27/2020 7:11:51 AM PST by NRx
The yield on the benchmark 10-year Treasury note skidded to a new low Thursday as concerns over the impact of the coronavirus dogged financial markets around the globe.
The 10-year Treasury yield dropped five basis points to below 1.25% for the first time ever while the 30-year yield slipped a similar amount to 1.747%. The 10-year rate has fallen 20 basis points since Monday in a reflection of global demand for the relative safety and positive yield U.S. debt offers. Bond yields fall as prices rise.
The move lower in yields also reflects traders’ expectations the Federal Reserve will step in at some point and cut rates. However, many economists doubt the central bank will deliver such relief and whether it will be effective.
“Wednesday’s attempted sell-off quickly reversed as reasons to think the safe-haven rally had gone too far were met with the realities of a still-expanding outbreak,” wrote Ian Lyngen, head of rates strategy at BMO Capital Markets. “News that several dozen cases were under investigation near New York City were just an exacerbating factor; it’s certain that more infections in varying locations will be announced before too long.”
“The prospects are quickly building for global central banks to foam the proverbial runway in hopes of a softer landing than might otherwise occur,” he added. “That said, there is an argument that the effectiveness of a rate cut or two in combating the outbreak isn’t worth using up the ammunition which will eventually be required to address a ‘real’ downturn in the domestic economy.”
(Excerpt) Read more at cnbc.com ...
A really hard bear market followed by recession is the one thing that could impede Trump’s reelection.
That’s what makes me question the motivations of lots of people ... media and RATS of course ... but also large players playing for the China team (including some major Wall Street firms).
For decades there has been the threat of China tanking our markets as an economic weapon. Of course, the implication was that because they owned so much debt they would start dumping bonds and obviously that is the reverse of what is happening now, as our bond market seems to be the only safe haven in the world.
Hmm.
It would be far worse in october.
It would be far worse in october.
Down 2% or so, the market was up over 30% just last year. A 10% correction would be normal.
But aren’t you impressed with the mass mind reading ability of the mainstream press?
Refinance folks! Wow. When this nonsense panic ends rates will shoot back up. (That is, assuming the Deep State isn’t engineering this panic to defeat Trump)
Well, the press is less accurate than the weatherman or the economic experts.
TRUMP is magnificent! The Swamp cannot stop PDJT!
GO TRUMP GO!
In what industries?
The Deep State has only one objective. Donald Trump has to be defeated. If it takes a worldwide depression and pandemic disease to get it done, so be it as far as they’re concerned. They want their power back at any cost!
“There is a whiff of panic on Wall Street.”
Ya think?
Mortgage rates on their way to 2.5% on the back of the 10yr bond.
Bonds have never been priced higher.
“A 10% correction would be normal.”
Not just normal, needed and perhaps more than 10% given the hectic pace of the rise.
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Stock market is a leading indicator for recessions, and recessions can last 9-12 months. A major crash (like 2008 for example) would probably lead to a recession.
I'm NOT PREDICTING THIS. More likely the stock market will reverse back upward soon.
Yes, and predicted.
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FYI: Already over 10% on both SP500 and Dow as of this morning.
Being an old guy and retired I am conservatively invested. I missed out on the huge rise in the markets (I was up a tad over 10%) but the other side is my downside as of now is a tiny bit under 3% due to me being fairly heavy in Treasuries.
which is appropriate for you.
I made a $$$ buying stocks after the two day decline in 1987. Many stocks were profitable within a year and the market regained ALL losses in just 2 years.
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