We had a decent 10 year auction–you can see the results below. Plenty of bids at a respectable yield.
Then we have a pause in tariffs—at least to some degree and off to the races we go. If you were big time short the market you are now bankrupt. All I can say is Wow.
It had been a rough day for our accounts–but now I look and they are a bit green. I guess we take it where we can get it.
Trying to tune out the background noise. I like to think it out as I type.
What did we learn from the last 4 or 5 days?
First off, I am glad Tim posted the results of the Treasury auction. If I read the results of the auction correctly, 103 Billion in offers were submitted but only 38 billion were accepted. What’s that tell me? They didn’t like the bids because they were out of the range the Treasury was willing to pay. This means 2/3rd’s of the traders wanted a higher interest to hold 10 yr notes. At least at this point in time. This doesn’t leave me feeling comfortable.
What does this tell me about equities like stocks. With the heavy selling the last few days a lot of what I had bought in the past 5 to 6 months are still showing a loss even after we had the frenzy of heavy buying yesterday.
Other stocks I had bought over the past years are still showing in the green and didn’t hit the lows of years past, but they didn’t recover to the highs they had been at lately.
Without going down the rabbit hole, what has happened? There were sectors of the market that were safe to hold and now they are looking like they are not. So? maybe they are headed lower. Is there any sector safe to hide out in?
If the Treasury action is indicating lenders want higher rates then maybe buyers of stocks want higher yield also so they want to pay less to drive up the yield on cost.
I am seeing this in the higher quality stocks that I paid a price to get 5% yield now going lower as buyers are offering less because they want 6%
So is the market headed lower? ( maybe) so should we sell into the rally or the dead feline bounce and wait to buy back in lower? again maybe. Depends on if you are comfortable as a buy and hold investor even if you feel the market is headed lower or are you a person who is wanting to book capital gains ( if you have them) and think you can buy back cheaper.
No matter what kind of an investor you are what does your gut or crystal ball tell you about which direction you think the market is headed?
That was one hell of a ride!
Looking though taxable munis, there are still AA/AAA 6.25% YTM+, but go down in quality a little and the yields expand. Seems better than a BB+ preferred of any issuer
Just a general comment. I have never seen a day in the market like today. Good thing I didn’t have access to my computer. When I get home I will find out how our accounts ended up.
I’m pretty much good on what I hold except I wish I had a little less energy related stuff. I broke my general rule of not placing buy and sell orders first thing in the day. I did do one sell order. I was still up with capital a gain on it but I felt there was a good possibility it could fall again as low as I bought it a year ago. If anything the market was showing me it was possible. I can always buy it back as I’m certain it will go lower.
Just a general comment. I have never seen a day in the market like today. Good thing I didn’t have access to my computer. When I get home I will find out how our accounts ended up.
I’m pretty much good on what I hold except I wish I had a little less energy related stuff. I broke my general rule of not placing buy and sell orders first thing in the day. I did do one sell order. I was still up with a capital gain but I felt there was a good possibility it could fall again as low as I bought it a year ago. If anything the market was showing me it was possible. I can always buy it back as I’m certain it will go lower.
I’m prohibited from day trading. And many issues I have to hold for 366 days or more! It is what it is and I learned long ago not to trade for pennies!!
The other day I was looking at someone’s mid cap ETF. Looked thru who owned it as well. LOL I did !!
At the end of trading on 4/2 (just before the tariff announcement) the 10 year was trading at about 4.19%. As of 3:18pm EST today, trading is at about 4.36%. The market was expecting about 10% tariffs. I would think 4.19% is the near-term absolute floor given that we still have 124% tariffs on China, and we are talking more about tariffs on new items like pharmaceuticals.
Of course, we still have inflation readings coming out in the next few days/weeks.
Yup. Panic selling never a good idea.
Expecting some of this largess to drop by end of day, but happily up 2% so far.
Holey moley – I sold puts on TGT, UPS, GOOGL, AAPL, NUE, CVX and others this morning with the $$$ I made selling stuff earlier this week. The stuff I sold was the stable stuff so that has not moved. I bought the less stable stuff with some of the proceeds too.
The craziest one was selling the 135 May put on CVX – I put in an order for $965/contract and it executed. Less than a minute later, it was $575 and I thought I was seeing things. The 6 MAIN Jun $49.40 puts I sold for $480/contract are now half of that.
I am now looking at buying back what I sold at prices a bit lower than where I sold.
NOTE: I made a lot of $$$ but this is not a healthy market…hunkering down again now.
Very obvious that the frightening happenings in the bond market caused the Great Negotiator and the Art of The Deal man to flinch and essentially duck for cover.
As we have seen many times before, the Bond Vigilantes have the final say and usually get to write the last chapter.
To paraphrase former Treasury Secretary Rubin when responding to former President Clinton.
“How many fuxxxxx votes does the bond market have?”
“Mr President, a lot”..
Edited by Tim McPartland
I love Jim Carville, and if I could be reincarnated as anything, I’d come back as the bond market.
I’ve never seen anything like that.
Volatility is good for us traders. I don’t complain about flinching and erratic movements I welcome it. Bond vigilantes are misnamed they are all about making money not setting policy, those who don’t like consequences of their own actions call them vigilantes.
Obviously Trump was afraid of losing access to Musk”s billions.
I don’t think it was very obvious. Longer interest rates were at this level about 40 days ago. Rates have been bouncing around dramatically for many months now.
Do you have any evidence to back up your claim? Or were hedge funds and whoever else tapping any liquidity they needed to not blow up?
“Bond Vigilantes” == trying not to drown.
Does not exactly give the same vibes.
Flinch? No way. This was planned. POTUS is selling seats at the table in Mar a Lago for $1M each, and his buddies are making a killing with all this volatility. I guess it’s not insider information if POTUS does it. Corruption of the highest order. More to come.
I doubt it But if you really believe that why not piggyback on it and make some money. I remember a discussion group where people looked for signs of manipulation and insider trading. Not to complain but so they could play along and make money too.
https://x.com/unusual_whales/status/1910033260975165836
Activity in call options went up by 10x just before the pause announcement – nothing to see here!
This guy is turning me into a day trader.
Maybe the label day trader needs to be changed to hour trader!