Interest Rates Popping With Stock Rally

The 10 year treasury has hit 2.98% before backing off a bit to 2.97% at this moment. While obviously we have no ability to forecast interest rates on a very short basis it would seem reasonable that the 10 year is set up for an assault on 3% again. If this happens we would expect some backing and filling before heading any higher. Of course everything we believe is conditioned to be on the lookout for presidential tweets which seem to move interest rates more than anything else.

In case you haven’t been watching REITs have moved nicely off the ‘bottom’ from a month or two ago with the average REIT up about 10%. Most of this movement has come from the retail related sectors–shopping centers and malls. Lowly CBL has moved up by 30% from lows set earlier this spring. We had bought a speculative position in CBL (of 500 shares) in the low $4.00’s, but sold too soon as we cut it loose with a 15% gain. We don’t write about moves like these as we don’t advocate speculation, but sometimes we get bored and try to pick off a few quarters.

Scrolling down this page you can see the progress of the REITs as it has 52 week highs and lows on it.

We would expect that over the next week we will see bunches of news on China trade and of course the N Korean summit. These news items will have more ‘juice’ in them them the upcoming economic reports–and certainly they can move the rates higher or lower.

2 thoughts on “Interest Rates Popping With Stock Rally”

  1. The 10 year yield is starting to get pretty high. Something to watch with this market rampaging on relatively low volume.

    1. Charles–as I thought it bounced off of 3% this morning and is backing off a bit. A singular strong economic number will push it over I think.

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