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Bond Markets Hating GDP Numbers

The equity markets think highly of a higher revision in the gross domestic product with the S&P500 up about .4% right now, with interest rates spiking higher with the 10 year treasury up at 3.86%—up 15 basis points.

It is not just the increase in the read on GDP for the 1st quarter driving pricing–but the much lower than expected unemployment claims number pitching in on the party.

If one was to make a call on the FOMC meeting in July right now one would have to say increase 1/4%—BUT since we have plenty of data yet to see related to inflation before the late July meeting and are data dependent one never knows. Fed officials already have set the table for at least 1 increase of 1/4% and they won’t miss the opportunity.

Todays news is sending banking and insurance preferreds lower by about 1%–it is obvious that we have plenty of time to buy ‘bargains’–but what is a bargain? I don’t know if have seen the bottom in these issues – my bank holdings have not hurt me, but I have some fear of the Fed insisting on a recession–certainly I won’t be buying any more bankers until we have more ‘data’.

17 thoughts on “Bond Markets Hating GDP Numbers”

  1. Tim-
    Bonds hating GDP numbers , but: “The equity markets think highly of a higher revision…. ??
    Maybe: they don’t think highly of higher revision?

  2. Tim,

    My 2-cent (worth about 1 cent) definition of a bargain:

    Bargain: A price that averages-down the basis of an existing hold, endlessly repeatable at predetermined strategically lower price/volumes.

    Requires patience and some positions go trade-less for years, though over time those “bargains” are make a difference. Before divvies, 34/41 positions are in the black. After divvies 39/41 are in the black (exceptions are KTBA (expert mkt) and 1 other).

    Recent bargains: CNHLO at $40.00, CNTHO at $46.92 and CKNQP at $94.14.

    Good luck to all.

          1. Ha, nope. Next time is a ban. I canceled my script at renewal. I will need a great deal to renew with those Richard Nixon crooks. Most of the good ball busting posters have been neutered. All is left are the PhilOKC pom pon cheerleader types who love losing money anyways.

            1. I’ve long suspected PhilOKC may be Pendy. Think I mentioned that back in 2019. Recalling a group of us had them hard against the ropes at one point in the comments section a few years back though it was a Sysiphean effort as they were deleting our posts as fast as we could insert them. Maybe, hopefully, we saved a few people.

              The site has a few good posters, though the owners/management appears devoid of even an ounce of moral or ethical fiber. I mean, in my view, they are SEC-level criminals. It’s all about the clicks, and for those reasons, haven’t participated in the site in years.

              1. Alpha,
                I have never paid for that site and you get what you pay for. But I contribute to Tim’s site for what I get from others here like you. Which reminds me, I am going to switch from doing an annual payment to more often.
                There have been ways around the paywalls on that other site, so I saw no reason to pay but these are slowly getting blocked. Most of the time I am just looking for ideas.

                1. Charles, I’m also truly grateful for this site, the members and the comraderie – not just for the shared investment perspectives – but also for the laughs.

                  As long as Tim continues to confirm I’m contributing at least one more dollar then you and Grid I’ll be happy.

                  Reading between the lines here some months ago, Tim received an anonymous contribution by mail. I think I know who that fine human being is and am thankful to them for kicking it all in gear.

                2. Done Tim,
                  Semi-annual now. Glad you accepted my last donation I sent in Nov.
                  Wish all the good people who have helped me like the rancher who came over when my sheep were attacked would accept something.
                  Now I have to take care of my mechanic. done several repairs to my truck and will not accept payment.
                  Everyone enjoy the 4th!

                    1. Alpha,
                      You must be sharing some of your Karma. I picked up some CKNQP for my wife’s ROTH today with some of the Cowen funds. Not quite as good a deal as you though.
                      Just a small account I will try to grow and stock with sock drawer issues. Thinking this is the account we will leave to the grandkids.

                    2. Excellent Charles.

                      Just keeps quietly paying and paying with no drama.

  3. Good timing for the interest rate spike

    I had a Treasury Bill mature today

    Was able to buy a one year replacement at 5.43%

    1. Excellent Mav. The yield curve on laddered 1 yr TBills has certainly been up-sloping – about a +0.6% delta over currently maturing 1 yr TBills.

      …also competing with banks efforts to capitalize with similar yielding 1 year CDs. Will be interesting to see how CDs rates compete going-forward.

  4. I think, regrettably, that regardless how good the inflation numbers may be, the yakkers (to use your term), will fixate on the relative–and it is only relative with 2% GDP–strength of the economy as a reason–excuse–to raise rates in July.

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