Tuesday, March 23, 2021

🔑 The Bond Market’s Hidden Bullish Message

Good morning. A lot has been made about rising interest rates. One point that hasn't gotten as..
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. A lot has been made about rising interest rates. One point that hasn't gotten as much attention is to the yield curve. The yield curve is simply a measure of what interest rates prevail at variously-dated Treasuries. A healthy curve, like the one we have now, is rising, with investors demanding higher rates to hold bonds of longer periods of time.

The yield curve is also steepening, a sign that the economy is growing. That's in contrast to an inverted yield curve, which tends to predict imminent recessions. The last yield curve? It triggered in late 2019, well before anyone had even heard of the coronavirus.

Are you worried about interest rates and their potential impact on the stock market yet?

Hit reply and share your thoughts. And thanks for sharing your thoughts so far!


Now here's the rest of the news:

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MARKETS
DOW 32,730.35 +0.31%
S&P 3,940.56 +0.70%
NASDAQ 13,377.544 +1.23%
*As of market close
Stocks moved higher on Monday, closing slightly off highs of the day.
Oil prices were unchanged, last trading at $61.47.
Gold declined 0.2 percent, changing hands at $1,739 per ounce.
Cryptocurrencies generally dropped, with Bitcoin last at $55,932.

Today's TOP TIPS
Rising Dividends Point to Strong Retail Trends Ahead
A number of companies reduced or eliminated dividend payments during the pandemic last year in a move to preserve cash. Now, a few companies are coming back to the table. But a select few firms have not only kept, but are growing their dividends.

Two of those plays are in retail. There's Williams-Sonoma (WSM). Their shares jumped to a new high on news of a higher dividend payout. But another company just announced a bump as well.

» FULL STORY

Insider Trading Report: Biohaven Pharmaceutical (BHVN)
John Childs, a director at Biohaven Pharmaceutical (BHVN), recently made a 13,157 share buy. The purchase came to just under $1 million even, and increased the director's stake by just over 0.5 percent.

That's the second buy from Childs this month following a 10,000 share buy earlier. Insiders have been both buyers and sellers in the past year, with sellers leading on total shares. Overall, insiders own nearly 14 percent of the company.

» FULL STORY

Unusual Options Activity: Netflix (NFLX)
Streaming giant Netflix (NFLX) has had a big increase in competition in the past two years. But that hasn't stopped one trader from making a hugely bullish bet on the company.

That's based on the June 2022 $950 calls. That strike price is about 85 percent higher than where shares currently trade. The buyer paid about $8.10 for the contract, which expires in more than 450 days. Over 6,000 contracts traded, a 39-fold jump from the open interest of 154.

» FULL STORY

IN OTHER NEWS
Big Tax Hikes Ahead? Maybe Not

In another sign of a recovering economy, the Federal Reserve allowed its supplementary leverage ratio (SLR) relaxation end. The bank undertook the change last April to allow banks to better manage their balance sheets at the start of the pandemic lockdown. Easing the rule allowed banks to have their deposits at Fed banks exempt from bank-capital requirements.
Investment-Grade Corporate Bonds Sour on Selloff

The selloff in the bond market is being felt across the entire sector, including in highly-rated corporate bonds. Rising yields mean lower prices, which is bad news for existing bondholders. The recent carnage in the bond markets shows that safe corporate bonds are down 5.4 percent so far this year, against small gains in the high yield (and high risk) space.
Fed's Powell Compares Bitcoin to Gold

Calling cryptocurrencies a speculative asset, Federal Reserve Chairman Jerome Powell stated that they were more like gold than like the U.S. dollar. He added that cryptocurrencies are still volatile, and as such, do not necessarily make for a strong store of value. At present, the Fed is in no rush to create a competing cryptocurrency of its own.
Canadian Pacific Railway Makes Offer for Kansas City Southern

Canadian Pacific made an offer for KSU at a 23 percent premium to its closing price on Friday. Railroads are already an oligopoly, but the latest merger deal will make the space even smaller. There's some speculation that further mergers may be possible. However, with only four players in the United States, the limit may have already been reached.
Side Hits Unicorn Valuation

Side, a tech company working to improve the branding for real estate agents and independent brokers, has joined the unicorn club. The company's latest Series D offering raised $150 million at a $1 billion valuation. Overall, the company has raised over $200 million since its inception, with its valuation up nearly seven-fold since its Series C capital raise.

S&P 500 MOVERS
TOP
KSU 11.122%
ASML 5.219%
DXCM 4.408%
KLAC 4.261%
ENPH 3.976%
BOTTOM
TRP 10.518%
SIVB 6.032%
CCL 5.111%
M 4.971%
AAL 4.566%

Quote of the Day
The Fed made clear…that it still has no plans to raise interest rates within the next three years. But that apparently rests on the belief that the strongest economic growth in nearly 40 years will generate almost no lasting inflationary pressure, which we suspect is a view that will eventually be proven wrong.
- Andrew Hunter, senior U.S. economist at Capital Economics, on why inflation may prove more persistent than an initial burst following a reopening of the economy.

Sponsored Content
Stock Options Are DEAD! "Penny Trades" Have WON…

Forget options! Because there's a NEW way to trade.

  • It can pay far more than stocks…
  • Trades can cost as little as 1¢…
  • These special trades can multiply as much as 529 times…
  • Warren Buffett made $12 billion with the idea behind this technique…
  • These trades can shoot up lightning fast — sometimes in weeks or even days…

One of these odd trades even shot up 183% in one day!

Our readers saw the chance at gains as high as an extraordinary 5,100% with one 19¢ trade.

I repeat — this is NOT options trading.

Here's the full scoop on this weird way to trade.


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