Massacre? Blood Bath? OMG, Whaaaat?! Why is Everything Red?
Call-It-What-You-May. Just tell me what is going on!?! Out on these streets? The markets are falling like a pack of cards, messing with someone’s emotions and what not.
How are you holding up? What’s your portfolio looking like?
Staying sane or barely above waters? because E. B. Thangzzzz
We all need some edu-ma-ca-tion…
You: Somebody help!! What is happening? I don’t quite get it.
Tomi: You know I gotchu. I’ve laid it all out below.
Here we go!
What is a Bond Yield: The amount of return an investor will realize on a bond, calculated by dividing its face value by the amount of interest it pays.
And so? Why should I care about Bond Yield as a Stock/Equity Investor? Because I am not understanding…
The Sell Off
Let’s break it down: So this past week, the surging bond market triggered a stock sell-off on Wall Street. E shock you? E shock Morgan Stanley too o!!
Jim Caron, head of global macro strategy at Morgan Stanley Investment Management, said one issue for the market was that the rate move took investors by surprise. “It was really the speed at which it happened that made everybody worried,” he said.
You should know that the 10-year Treasury yield, which closely ties to 30-year mortgage rates and other consumer loans, came in at 1.5% on Thursday – the highest it has been in more than a year. This fast upsurge in yields, scared the living-day-light out of stock investors and boom, the erratic sell-off began. Nasdaq? Down 4.9% for the week, because technology shares were hit the hardest. However, the S&P 500 was down just about 2.4% for the week.
Down is down sha, las las.
Look people, at this point..
I am just
Sick and tired…
of being
Sick AND TIRED
of not being a millionaire…
yet.
But okay, because to earth.
What does this mean for us, mere mortals?
“I think it’s probably going to be a short-term tug of war,” said Sam Stovall, chief investment strategist at CFRA. Think of it this way, so far, stocks have reflected optimism about the economy, and now bonds joined the party.It’s not really all doomsday, fam.
“People forget the reason why we’re looking at very high year-on-year increases in [economic] indicators. It’s that we were just entering the depths of recession…and we are now in many measures just getting back above pre-pandemic levels,” he said.
Historically, stocks on average have performed poorly in February, but this year they were higher, lifted by an improving economy, the vaccine rollout and the prospect of a big stimulus package. The Biden administration’s $1.9 trillion stimulus package should go to a Senate vote in the week ahead.
So essentially, all of these indicate an expected economic boost and that drove yields higher.
What’s The Future?
“March is actually a pretty good month for the market. It is the fourth best in terms of average price change. It is the fourth best in frequency of advancement, yet it is the fourth lowest in terms of volatility,” Stovall said. The average gain in March since World War II has been 1.1%. In the 14 years that felt like this, when stocks were lower in January but higher in February, the S&P rose an average 1.9% in March.
Hopefully, that made you crack a smile.
So what’s your investing/trading plan for the coming week? Just so you know… earnings be like:
Earnings in the Week Ahead:
- Monday: Zoom Video, MBIA, Ambac Financial, Hilton Grand Vacations, Inovio Pharma, Perrigo, Boingo Wireless, Tegna
- Tuesday: Target, Box, Hewlett Packard Enterprise, Nordstrom, Ross Stores, International Game Technologies, AutoZone Kohl’s, Abercrombie and Fitch
- Wednesday: Wendys, Dollar Tree, Brown-Forman, Vivendi, Splunk, Marvell Tech, Snowflake, Vroom, American Eagle Outfitters
- Thursday: Broadcom, Costco, BJ’s Wholesale, Gap, Burlington Stores, Ciena, Michael’s Cos, IMAX, Kroger, Cooper Cos
- Friday: Big Lots
You know the drill:
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As we hope for a better & green week ahead, from all of us at Trove,
E. Go. Better.
XOXO
