L'intérêt à découvert pour iShares 20+ Year Treasury Bond ETF donne aux investisseurs une idée du degré auquel les investisseurs parient sur la baisse de l'action de iShares 20+ Year Treasury Bond ETF. Les données sur l'intérêt à découvert sont mises à jour toutes les deux semaines.

iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), Rapport sur les intérêts à découvert

iShares 20+ Year Treasury Bond ETF

The fund generally invests at least 90% of its assets in the bonds of the underlying index and at least 95% of its assets in U.S. government bonds. The underlying index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity greater than or equal to twenty years.

FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund

FlexShares Morningstar Emerging Markets Factor Tilt Index Fund

FLEXSH MNGST EMR MKT FCTR TL IDX ETF

THERALASE TECHS INC by Theralase Technologies Inc.

Theralase Technologies Inc

Tradr 2X Long TLT Monthly ETF

Amplify ETF Trust Amplify Bloomberg U.S. Treasury Target High Income ETF

Tradr 1.75X Long TLT Quarterly ETF

iShares Trust iShares 20+ Year Treasury Bond BuyWrite Strategy ETF

Tele2 AB

TELE2 ORD

ISHARES 20 PLS YEAR TREASURY BND ETF

To gain an edge, this is what you need to know today.
<figure class="wp-block-image size-large is-resized"><img decoding="async" src="https://thearorareport.com/wp-content/uploads/2024/11/2024-11-05_08h17_44.png" alt="" style="width:624px" /></figure>
<h3 class="wp-block-heading">The Plan</h3>
Please <a href="https://thearorareport.com/chart-analysis-stock-market-election-opportunitites-tlt-mc-11052024">click here</a> for an enlarged chart of iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>).
Note the following:
<ul>
<li>Going into the election, the most important chart is that of the bond market.&nbsp; The reason is the reaction to the election from the bond market is likely to be correct compared to the first reaction from the stock market.</li>
<li>The chart shows the contrary Arora call that bonds would fall when the Fed cut interest rates by 50 bps.&nbsp; At the time of the contrary Arora call, everyone was predicting that bonds would go up.</li>
<li>The chart shows that the Arora call has proven spot on.</li>
<li>The chart shows that bonds are now at the bottom band of the top support zone.</li>
<li>Consider keeping this chart handy and see if bonds rally above the top band of the top support zone or they break down and move towards the bottom support zone.</li>
<li>In addition to understanding the chart of the bond market, the following is the essential foundation of how to capture opportunities after the election.
<ul>
<li>Wall Street positioning.&nbsp; Positioning is an important Wall Street mechanic.</li>
<li>Retail investor positioning</li>
<li>Your positioning</li>
</ul>
</li>
<li>Wall Street is positioned for the following:
<ul>
<li>A significant rally in stocks, bonds, gold, and the dollar after the election</li>
<li>Senate control switching from Democrats to Republicans</li>
<li>House control switching from Republicans to Democrats</li>
<li>An even probability of a Trump win or a Harris win.</li>
</ul>
</li>
<li>Here is the positioning of retail investors:
<ul>
<li>Republican retail investors are heavily positioned in the Trump trade.</li>
<li>Democrat retail investors are heavily positioned in the Harris trade.</li>
</ul>
</li>
<li>The problem with positioning of retail investors is that if their candidate wins, they will do fine.&nbsp; However, if the other candidate wins, they will incur massive losses. This is not the way to maximize the wealth you generate over your lifetime. It is important to keep your politics separate from your investing.&nbsp;&nbsp;</li>
<li>In The Arora Report analysis, Wall Street is oblivious to the simple fact that the stock market has been front running the election.&nbsp;&nbsp;
<ul>
<li>Historically, there is anxiety and a pullback before the election in September and October.&nbsp; Historically, when the election is over, the overhang of anxiety lifts irrespective of who wins, and the stock market rallies.</li>
<li>This time is different because there has not been any anxiety, and there was not a pullback in September and October.&nbsp; The reason is that Wall Street has been front running the election.</li>
<li>There is no recent historical precedent of Wall Street front running the election.</li>
<li>Historically smart money uses a combination of hedging and lightening up positions before the election.&nbsp; This time is different in that smart money has been aggressively hedging, more than any other recent election, but has not been lightening up positions.</li>
<li>Even though there is no precedent of election front running, there are hundreds of precedents of Wall Street front running less important events.&nbsp; A typical reaction after the event is over is to sell the news.</li>
</ul>
</li>
<li>In The Arora Report analysis, prudent investors should be aware that there is a fair probability of a sell the news reaction.&nbsp; However, the probability of a rally is higher because of the power of the momo crowd.&nbsp;</li>
<li>Going into the election, investors should be very cognizant of the positioning of their own portfolios.&nbsp; The Arora Report portfolios are well balanced between the Harris trade and the Trump trade.&nbsp;&nbsp;</li>
<li>The Arora Report portfolios are also sufficiently protected with the protection band and there is sufficient cash to take advantage of new opportunities.&nbsp; Investors who are not holding enough cash will not be able to take advantage of new opportunities.</li>
</ul>
<h3 class="wp-block-heading">Magnificent Seven Money Flows</h3>
In the early trade, money flows are positive in Alphabet Inc Class C (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>), Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>), NVIDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), and Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>).
In the early trade, money flows are neutral in Amazon.com, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) and Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>).
In the early trade, money flows are positive in SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>).
<h3 class="wp-block-heading">Momo Crowd And Smart Money In Stocks</h3>
Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).  The most popular ETF for silver is iShares Silver Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLV#NYSE">SLV</a>).  The most popular ETF for oil is United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>).
<h3 class="wp-block-heading">Bitcoin</h3>
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) is range bound.
<h3 class="wp-block-heading">Protection Band And What To Do Now</h3>
It is important for investors to look ahead and not in the rearview mirror.&nbsp; The proprietary protection band from The Arora Report is very popular.&nbsp; The protection band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges.&nbsp; The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.&nbsp; If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.&nbsp; A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.&nbsp; When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.&nbsp; High beta stocks are the ones that move more than the market.
<h3 class="wp-block-heading">Traditional 60/40 Portfolio</h3>
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.&nbsp; Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever <a href="https://thearorareport.com/generate-wealth-newsletter-benzinga">Generate Wealth Newsletter</a>.

Market Summary

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iShares Trust Barclays 20+ Year Treasury Bond Fund

TSLA

Here Is How Investors Can Capture Opportunities From The Election

The U.S. services sector's economic momentum is firing at all cylinders, with business activity in October reaching its strongest level <a href="https://www.benzinga.com/news/econ-s">in over two years.</a>
According to the Institute for Supply Management, the Services PMI surged to 56% in October 2024, up from 54.9% in September, defying expectations of a dip to 53.8%.
This result marks the fastest pace of expansion in the U.S. services sector since August 2022. The ISM Services PMI has shown growth in 20 of the past 22 months since January 2023, with October's reading standing 3.7 percentage points above the 2024 average of 52.3%.
&#8220;The increase in the Services PMI&nbsp;in October was driven by boosts of more than 4 percentage points for both the Employment and Supplier Deliveries indexes. The Business Activity and New Orders indexes both dropped by at least 2 percentage points. Each of the four subindexes are now above their averages for 2024,&#8221; stated Steve Miller, chair of the ISM Services Business Survey Committee, said.
<h3 class="wp-block-heading">ISM Services PMI For October: Key Highlights</h3>
<ul>
<li>The subindex for Business Activity eased from 59.9% to 57.2% in October.</li>
<li>The subindex for New Orders eased from 59.4% to 57.4% in October. </li>
<li>The subindex for Prices eased from 59.4% to 58.1%. </li>
<li>The subindex for Employment rose from 48.1% to 53%, well above the expected 48%. The outcome marked the highest level in employment index since September 2023. </li>
</ul>
&#8220;Concerns over political uncertainty were again more prevalent than the previous month. Impacts from hurricanes and ports labor turbulence were mentioned frequently, although several panelists mentioned that the longshoremen's strike had less of an impact than feared due to its short duration,&#8221; Miller added. 
<h3 class="wp-block-heading">Market Reactions</h3>
On Tuesday, U.S. stocks rebounded as investors reacted positively to the latest ISM Services PMI data, alleviating earlier political concerns as Americans headed to the polls to elect the 47th president.
The S&amp;P 500, represented by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), rose 0.8%. The tech-heavy Nasdaq 100, tracked by the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), rallied nearly 1%, while the SPDR Dow Jones Industrial Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) edged 0.6% higher.
Yields on 10-year Treasury bonds rose 7 basis points to 4.36%. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) fell 0.5%. 
The U.S. dollar index — as tracked by the  Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>) — weakened 0.5%.
Now Read:
<ul>
<li><a href="https://www.benzinga.com/markets/asia/24/11/41722178/if-trump-and-republicans-sweep-dollar-may-climb-7-but-harris-win-could-bring-5-drop-says-jpmorgan">If Trump And Republicans Sweep, Dollar May Climb 7% — But Harris Win Could Bring 5% Drop, Says JPMorgan</a></li>
</ul>
Image: Shutterstock

Macro Economic Events

Broad U.S. Equity ETFs

Treasuries

Econ #s

Economics

ETFs

SPDR Dow Jones Industrial Average ETF Trust

PowerShares DB US Dollar Index Bullish Fund

US Services Sector Gauge Rises More Than Expected To Over 2-Year Highs As Employment Index Defies Hurricane Shocks

A widely watched gauge of bond market volatility has surged to its highest level in over a year as American voters cast their ballots in one of the closest presidential <a href="https://www.benzinga.com/topic/2024-election">races in recent history. </a>
The ICE BofAML U.S. Bond Market Option Volatility Estimate Index, or &#8220;MOVE&#8221; index, closed at 136 on Monday, reaching levels last seen in early October 2023. 
This spike in the MOVE index highlights mounting anxiety in the bond market, driven by political uncertainty and fears of inflationary fiscal policies.
<h3 class="wp-block-heading">What Is The MOVE Index?</h3>
The MOVE index, often described as the VIX for bonds, measures expected volatility in the Treasury market based on options pricing. 
Like the VIX, which tracks volatility in the equity market, the MOVE index is seen as a &#8220;fear gauge&#8221; for fixed-income investors. 
Higher MOVE readings indicate increased uncertainty about future bond price movements, reflecting traders&#8217; fears around interest rates, inflation, and broader economic conditions.
See Also: <a href="https://www.benzinga.com/money/guide-to-volatility-indices-vix">Beginners Guide to VIX or Volatility Indices</a>
<h3 class="wp-block-heading">Election Jitters Fuel Bond Market Anxiety</h3>
The U.S. presidential election has investors on edge, with polls showing one of the tightest races in modern American history. 
Neither Vice President Kamala Harris nor ex-President Donald Trump held a meaningful lead in critical battleground states ahead of Nov. 5, <a href="https://www.nytimes.com/interactive/2024/us/elections/polls-president.html">wrote</a> Nate Cohn, chief political analyst at the New York Times. 
&#8220;In the history of modern polling, there's never been a campaign where the final polls showed such a close contest,&#8221; he added.
The possibility of a prolonged, contentious result has amplified concerns in the bond market, where volatility has jumped 51% since late September. 
Fixed-income investors are also weighing the potential fiscal impact of each candidate&#8217;s policies, especially if the winner's administration fuels inflation and adds to the federal debt.
According to the Committee for a Responsible Federal Budget (CRFB), Trump's spending plans could increase the national debt by $7.75 trillion over the next decade, driving the debt-to-GDP ratio to 143% by 2035. By contrast, Kamala Harris's proposals would add $3.95 trillion to the debt, resulting in a debt-to-GDP ratio of approximately 134% by the same year.
Chart: Bond Volatility Index Has Risen By Over 50% Since Late-September
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="501" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31-1024x501.png" alt="" class="wp-image-630321" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31-1024x501.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31-768x376.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31-1536x752.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Trump's Tariff Plans Stoke Inflation Fears</h3>
Under a Trump administration, inflation could rise if proposed tariffs on Chinese imports and other goods come into effect. 
Trump has floated a 60% tariff on Chinese products and a universal 10% tariff, policies which JPMorgan analysts estimate could drive inflation up by as much as 2.4% in a worst-case scenario. 
&#8220;Tariffs are inflationary,&#8221; IMF deputy managing director Gita Gopinath warned in October.
With inflation a growing concern, Treasury yields have been on an upward trajectory, as investors demand higher returns to offset potential future price increases. 
Yields on the 10-year Treasury bond have risen by 50 basis points last month and hit 4.33% on Tuesday. 
<h3 class="wp-block-heading">&#8216;Bond Vigilantes&#8217; Are Back</h3>
The bond market&#8217;s reaction to these uncertainties has been swift and severe. 
&#8220;Nothing seems to be stopping U.S. Treasury bond yields from rising,&#8221; said veteran Wall Street investor Ed Yardeni. 
&#8220;The Bond&nbsp;Vigilantes&nbsp;have been voting early (and voting often) by selling US Treasury notes and bonds,&#8221; he added. 
The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), which tracks long-dated Treasuries, fell nearly 6% in October 2024.
With both candidates likely to enact substantial stimulus, Yardeni stated, &#8220;The bond market is tightening the economy itself,&#8221; as investors anticipate inflation and higher interest rates. 
Yardeni indicated this surge in yields could push the 10-year Treasury into the 5% range, a level not seen since before the financial crisis.
Now Read:
<ul>
<li><a href="https://www.benzinga.com/news/earnings/24/11/41740288/us-stocks-set-for-cautious-start-as-investors-brace-for-volatility-on-election-day-expert-points-to">US Stocks Set For Cautious Start As Investors Brace For Volatility On Election Day: Expert Points To &#8216;Pretty Well Overall&#8217; Historical Performance</a></li>
</ul>
Image: Shutterstock

Analyst Color

Specialty ETFs

Bond Market Fear Gauge Soars To 1-Year High Ahead Of US Election Results: 'Bond Vigilantes Have Been Voting Early'

Gold prices surged 1% on Tuesday, hitting a new all-time high of $2,770 per ounce, as investors pour into the commodity amid mounting concerns over ballooning <a href="https://www.benzinga.com/news/econ-s">deficits and political uncertainty. </a>
Up 34.2% year-to-date, gold is on track for its strongest annual performance since 1979, the third best gain in the last half a century.
Gold has outperformed traditional asset classes, such as stocks — the S&amp;P 500 has climbed 23% this year — and bonds, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), a benchmark for long-dated U.S. Treasury bonds, down 7%.
The precious metal, as tracked by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), is on pace to close its fourth consecutive month — and seventh of the last eight weeks — in positive territory, underscoring the strong bullish momentum driving investors.
<h3 class="wp-block-heading">Chart: 2024 Shapes Up To Be Gold&#8217;s Third Best Year In The Last 50</h3>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="486" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303-1024x486.png" alt="" class="wp-image-619845" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303-1024x486.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303-300x142.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303-768x364.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303-1536x729.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Gold&#8217;s Break From Traditional Correlations</h3>
Gold's recent rally has diverged from its usual relationship with both the U.S. dollar and Treasury yields. 
Typically, a stronger dollar or rising Treasury yields put downward pressure on gold prices. The logic is straightforward: as a non-yielding asset, gold becomes less attractive when risk-free U.S. Treasury bonds start offering higher real returns. In such environments, investors usually favor bonds over gold, reducing demand for the precious metal.
Lately, however, the opposite has occurred. Despite a stronger dollar and rising Treasury yields, gold prices have continued to climb, defying the usual negative correlation. 
In October alone, gold rose 5.1%, while the U.S. Dollar Index (DXY) climbed 3.6% and the 10-year Treasury yield jumped more than 50 basis points to 4.35%.
This decoupling suggests that investors are turning to gold for reasons beyond the traditional factors. 
Otavio Costa, a macro strategist at Crescat Capital, indicated that gold is now signaling potential future inflation risks that could complicate the Federal Reserve&#8217;s policy options. 
"Gold is rising as the market begins to price in the likelihood of a Fed forced to cut rates further, despite persistent inflation," Costa said. 
"Gold is also signaling the potential for another wave of inflation ahead, making the Fed's job even harder as interest payments for federal and local governments are already nearing 5% of GDP," he said. 
According to Costa, "the genie has been out of the bottle since late 2020, and inflationary trends remain deeply rooted in the economy.&#8221;
<h3 class="wp-block-heading">Deficit Concerns Add Fuel To Gold&#8217;s Rally</h3>
A major driving factor behind the recent surge in gold: mounting fiscal concerns, particularly in the United States.
With trillion-dollar annual deficits becoming the new norm, economists warn that government spending is becoming unsustainable. 
Michael Gayed, CFA, said: "I don't think there's much question that trillion-plus dollar annual deficits are becoming the norm more than the exception."
Further complicating the fiscal outlook are political developments, with neither Democrats nor Republicans showing a strong commitment to reducing the national debt. 
Analysts predict that increased spending on defense, climate adaptation and demographic challenges will push budgets even further into the red.
Bank of America analyst Michael Widmer recently wrote: &#8220;Gold may be the last perceived safe haven asset standing&#8221; given the reluctance of governments to curb spending.
<h3 class="wp-block-heading">Global Policy And Gold As The Last &#8216;Safe Haven&#8217;</h3>
Widmer's view reflects a broader consensus among analysts that gold is becoming the preferred safe-haven asset amid escalating debt and global policy trends favoring fiscal expansion. 
The IMF estimates that new spending requirements across advanced economies could reach 7%-8% of GDP annually by 2030.
U.S. budget deficits are not forecasted to fall below 6% of the GDP in any year for the remainder of the decade, as per the latest IMF Fiscal Monitor estimates. 
Should markets start questioning the sustainability of these deficits, gold could attract even more investment as a reliable store of value.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41495286/deficit-strain-in-washington-will-get-worse-imf-warns-national-debt-projections-rev">Deficit Strain In Washington Will Get Worse, IMF Warns: National Debt Projections Revised Higher, Stabilization Unlikely By 2029</a></li>
</ul>
Photo via Shutterstock.

Commodities

Federal Reserve

Gold Hits Record Highs, Defies Market Gravity: Why The Precious Metal Is Decoupling From Treasury Yields

Yields on longer-dated U.S. 30-year Treasury bonds have breached the 4.50% threshold, a significant level last witnessed on July 25, raising alarms <a href="https://www.benzinga.com/markets">across global financial markets. </a>
The 10-year U.S. Treasury yield has also seen a notable increase of 63 basis points, climbing to 4.25% since the Federal Reserve&#8217;s meeting on Sept. 18.
This surge in yields reflects mounting concerns over fiscal sustainability and resuming inflationary pressures, as stocks tumbled broadly in response. 
The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) declined by an additional 0.3%, marking its fifth negative week in the last six and approaching a 10% drop from mid-September highs.
Wall Street, meanwhile, is facing its third consecutive day of declines. The S&amp;P 500, as represented by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), is poised to end a <a href="https://www.benzinga.com/markets/equities/24/10/41497765/wall-street-slumps-for-third-straight-day-as-investor-sentiment-fades-dollar-strength-resumes-bo">six-week winning streak.</a>
As the presidential election approaches in less than two weeks, investor apprehension appears to center on the potential for further expansionary fiscal policies in the U.S., which could exacerbate the already substantial federal budget deficit.
<h3 class="wp-block-heading">Bond Vigilantes Are Back</h3>
&#8220;The Bond Vigilantes are voting early,&#8221; stated Wall Street veteran investor Ed Yardeni in a note Wednesday.
According to the expert, bond Vigilantes appear to be signaling disapproval of Fed Chair Jerome Powell&#8216;s Sept. 18 decision to implement a 50 basis point rate cut.
This move, viewed by some as premature, has raised fears that the Fed may inadvertently stoke further economic overheating. 
Yardeni maintained his forecast for bond yields to remain in the 4.00% to 4.50% range, but he expressed caution about the Fed&#8217;s ability to balance growth and inflation risks in the near term.
&#8220;The Bond Vigilantes may also be voting against Washington, figuring that no matter which party wins the White House and the Congress, fiscal policies will bloat the already bloated federal government budget deficit and heat up inflation. The next administration will face net interest outlays of over $1 trillion on the ballooning federal debt,&#8221; he added.
<h3 class="wp-block-heading">Macro Concerns: The U.S. Dollar And US Budget Deficits</h3>
Otavio Costa, macro strategist at Crescat Capital, raised concerns over the long-term trajectory of the U.S. dollar. In a pointed post on X, Costa highlighted the &#8220;magazine cover curse&#8221; phenomenon, referencing The Economist&#8217;s October cover depicting the U.S. dollar as a rocket soaring skyward—a symbol of America's economic dominance.
Costa warned that while the U.S. dollar might appear strong in the short term, the substantial share of GDP devoted to servicing debt (around 5%) could lead to a dollar depreciation against other fiat currencies over the next one to three years.
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Magazine cover curse alert &#x1f6a8; I&#39;m seriously concerned about the risk of the US dollar relative to other fiat currencies over the next 1-3 years. And no, I'm not talking about hard assets — that devaluation is happening as I type this. My concern lies with the potential… <a href="https://t.co/E38AjqpQ1G">pic.twitter.com/E38AjqpQ1G</a>
&mdash; Otavio (Tavi) Costa (@TaviCosta) <a href="https://twitter.com/TaviCosta/status/1848870862801539442?ref_src=twsrc%5Etfw">October 22, 2024</a></blockquote>
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Adding to the growing concern, the International Monetary Fund (IMF) released a more pessimistic <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41495286/deficit-strain-in-washington-will-get-worse-imf-warns-national-debt-projections-rev">fiscal forecast for the U.S. on Wednesday. </a>
The IMF now expects the U.S. budget deficit to reach 7.6% of GDP in 2024, up from its previous April estimate of 6.5%. The outlook for 2025 has also deteriorated, with the deficit projected to hit 7.3% of GDP, slightly higher than the prior 7.1% forecast. 
The IMF emphasized that the U.S. deficit will likely remain above 6% of GDP until at least 2029, driven by rising debt servicing costs and persistent fiscal imbalances. It warned that both the U.S. and China face a &#8220;low probability&#8221; of stabilizing their debt levels by the end of the decade.
Read Next:
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41494450/3-regional-bank-stock-picks-from-jpmorgan-analyst-encouraged-after-solid-q3">3 Regional Bank Stock Picks From JPMorgan: Analyst &#8216;Encouraged&#8217; After Solid Q3</a></li>
</ul>
Photo: Shutterstock

30-Year Treasury Yield Tops 4.50%, Raising Red Flags For Markets: 'Bond Vigilantes Are Voting Early,' Says Veteran Investor

A recent surge in mortgage rates is weighing heavily on homebuyers, causing a sharp and sustained drop in mortgage <a href="https://www.benzinga.com/money/mortgages">applications across the U.S. </a>
This downturn marks the fourth consecutive weekly decline, signaling growing pressure from elevated borrowing costs.
<h3 class="wp-block-heading">Mortgage Applications Plummet for Fourth Straight Week</h3>
For the week ending Oct. 18, mortgage applications in the U.S. tumbled by 6.7%, extending a 17% plunge from the previous week, according to data shared Wednesday by the Mortgage Bankers Association.
This represents the fourth straight week of contraction in mortgage demand, as the recent uptick in interest rates to two-month highs has increasingly discouraged potential buyers from entering the housing market.
Notably, applications to refinance existing home loans, which tend to be more sensitive to short-term interest rate changes, dropped 8.5% for the week, extending a prior 26% plunge. Applications for new home purchases also declined by 5%, reflecting a broader weakness in housing market activity.
The drop in activity coincides with a significant rise in key interest rates, driven by robust economic data and market expectations of a less accommodative stance by the Federal Reserve for the rest of 2024.
<h3 class="wp-block-heading">Mortgage Rates Remain Elevated</h3>
The average interest rate for a 30-year fixed-rate mortgage with conforming loan balances (up to $766,550) remained stable at 6.52%, close to its two-month high.
For larger loans (jumbo mortgages, which cover amounts above $766,550), the rate edged down slightly to 6.73%, a marginal drop of 3 basis points from the previous week.
Last week, Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, highlighted, &#8220;Demand is holding up to an extent for prospective first-time buyers. The recent uptick in rates has put a damper on applications.&#8221;
Mortgage rates have surged in tandem with rising long-term Treasury yields, which had been steadily climbing before leveling off last week.
The rising trend in Treasury yields resumed this week, further clouding the outlook for mortgage demand. 
Yields on 30-year Treasury bonds have jumped by over 10 basis points to 4.5% as of Wednesday. Given that Treasury yields serve as a key benchmark for mortgage rates, any further increases could intensify pressure on already weakened mortgage demand.
<h3 class="wp-block-heading">Impact On Mortgage-Related Stocks</h3>
The cooling of the housing market is also evident in the declining performance of mortgage-related stocks.
Both the iShares Mortgage Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REM#NYSE">REM</a>) and the VanEck Mortgage REIT Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MORT#NYSE">MORT</a>) have seen significant declines, falling for two consecutive days this week. 
Since their highs in September, both ETFs have shed about 8-9% in value, underscoring the negative impact of declining demand in the market performance of mortgage real estate investment trusts (REITs).
The popular iShares 20+ Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NYSE">TLT</a>), which tracks long-term Treasury bonds, has dropped 2% for the week and is down 9.5% from its late September levels. 
Looking ahead, market participants remain focused on the Federal Reserve&#8217;s next move. 
The CME FedWatch tool, which tracks market-implied expectations for Federal Reserve policy, shows an 87% chance that the central bank will cut interest rates by 25 basis points at its next meeting on Nov. 7.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/markets/bonds/24/10/41455678/gold-on-track-for-best-year-since-1979-veteran-investor-says-sell-bonds-buy-gold">Gold On Track For Best Year Since 1979: Veteran Investor Says &#8216;Sell Bonds, Buy Gold&#8217;</a></li>
</ul>
Image created using artificial intelligence via Midjourney.

REIT

Sector ETFs

Real Estate

MORT

iShares FTSE NAREIT Mortgage PLUS Capped Index Fund

Mortgage Applications Fall For Fourth Straight Week As High Rates Squeeze Homebuyers

With rising geopolitical tensions and the Federal Reserve shifting toward rate cuts, 2024 is shaping up to be gold's best year in over four decades, reigniting strong investor demand <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41390144/gold-could-reach-3-000-by-2025-bank-of-america-analyst-says-ultimate-perceived-safe">for the precious metal.</a>
Gold, as tracked by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), has surged 33% year-to-date as of Oct. 22, positioning it for its strongest year since 1979, when it spiked 136%.
In stark contrast, U.S. long-dated Treasury bonds are suffering. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) is down 6.7% for 2024, marking the fourth consecutive year of losses and a steep 48% drop since its 2020 highs.
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="500" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204-1024x500.png" alt="" class="wp-image-607479" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204-1024x500.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204-768x375.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204-1536x750.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Sell Bonds, Buy Gold?</h3>
Veteran Wall Street investor Ed Yardeni, president at Yardeni Research, has been urging investors to &#8216;sell bonds, buy gold&#8217; since mid-August.
&#8220;Our Aug. 19, 2024 Morning Briefing was titled, ‘Get Ready to Short Bonds?'&#8221; Yardeni said in a note on Monday, citing the Fed's overly optimistic rate-cut expectations at the time.
&#8220;Bond investors may be expecting too many interest-rate cuts too soon,&#8221; he warned, predicting that yields would rebound sharply on stronger economic data.
Read Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41434510/us-economy-eyes-3-4-growth-in-q3-is-a-soft-landing-turning-into-a-reacceleration">US Economy Eyes 3.4% Growth In Q3: Is Soft Landing Turning Into Reacceleration?</a>
The expert&#8217;s view was right. The 10-year Treasury yield, which stood at 3.88% in mid-August, has surged to 4.18% on Oct. 21— a 56-basis-point jump.
In his April 7 report, Yardeni advised investors to &#8220;add to precious metals positions,&#8221; reiterating his long-standing view that gold remains a key investment hedge, especially as geopolitical risks rise.
His argument is simple: with bond markets vulnerable to rising yields and uncertainty over Fed policy, precious metals offer a safe haven for long-term investors.
<h3 class="wp-block-heading">Why Is Gold Rallying In 2024?</h3>
Gold has traditionally been viewed as a hedge against inflation, but its recent surge comes even as inflation has moderated. Yardeni points to rising geopolitical tensions, particularly in the wake of Russia&#8217;s invasion of Ukraine, and heightened economic uncertainty as major reasons for gold&#8217;s appeal. 
With Russia&#8217;s foreign reserves still frozen and global tensions on the rise, many nations are turning to gold as a secure store of value. 
This &#8220;de-dollarization&#8221; trend is likely another catalyst behind the metal&#8217;s sharp rise, as countries seek to diversify away from U.S.-denominated assets.
&#8220;Gold is now a hedge against U.S. economic sanctions,&#8221; Yardeni said, referring to moves by China and other nations to increase their gold reserves as a safeguard against potential asset freezes.
Read Next:
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41431485/goldman-sachs-predicts-bleak-long-term-s-p-500-returns-as-market-concentration-hits">Goldman Sachs Predicts Bleak Long-Term S&amp;P 500 Returns As Market Concentration Hits &#8216;Highest Level In 100 Years&#8217;</a></li>
</ul>
Photo: Shutterstock

Gold On Track For Best Year Since 1979: Veteran Investor Says 'Sell Bonds, Buy Gold'

U.S. major indices fell on Monday as rising Treasury yields and a strengthening dollar dampened risk sentiment. Investors are reassessing the economic outlook and weighing potential risks tied to the Federal Reserve&#8217;s <a href="https://www.benzinga.com/topic/interest-rates">next interest rate moves.</a>
Yields on the 10-year Treasury note surged 9 basis points to 4.18%, reaching their highest level since late July. Meanwhile, 30-year Treasury bond yields climbed to 4.5%. The spike in yields pushed the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) down by 1.4%, reflecting renewed pressure on long-duration bonds.
A gauge of the greenback, as tracked by Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), rose 0.5%. 
On Monday, Dallas Fed President Lorie Logan hinted that gradual rate cuts are on the cards if the economy meets forecasts. Market-implied expectations for a 25-basis-point rate cut in November dipped slightly from 90% to 85%, according to CME FedWatch.
The CBOE Volatility Index (VIX), commonly known as Wall Street's "fear gauge," jumped 5% on Monday, marking its largest surge in two weeks.
The S&amp;P 500 traded 0.5% lower at midday trading in New York, with all its 11 sectors in the red. The Dow Jones Industrial Average shed 0.9%, while the Russell 2000, which tracks small-cap stocks, tumbled 1.7%. Technology stocks experienced minor losses. 
Despite the negative session, NVIDIA Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) gained over 2%, hitting $141.80 per share and notching fresh all-time highs.
In commodities, gold took a breather after four consecutive sessions of gains, while oil prices rebounded 1.6%, driven by renewed supply concerns. Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) fell sharply, losing 2.8%. 
<h1 class="wp-block-heading">Monday&#8217;s Performance In Major U.S. Indices, ETFs</h1>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day %chg</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>20,290.48</td>
<td>-0.2%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,840.64</td>
<td>-0.4%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>42,904.60</td>
<td>-0.9%</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,237.90</td>
<td>-1.6%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12:55 p.m. ET</figcaption></figure>
According to <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent101824&amp;t=be2bearmibe3na1">Benzinga Pro</a> data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) fell 0.3% to $582.24.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;fell 0.7% to $429.46.</li>
<li>The tech-heavy Invesco QQQ Trust Series (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) eased 0.2% to $493.66.</li>
<li>The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) dipped to $222.12.</li>
<li>The Communication Services Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>) outperformed, up 0.9%. The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) lagged, down 0.6%.</li>
</ul>
<h1 class="wp-block-heading">Monday&#8217;s Stock Movers</h1>
<ul>
<li>Boeing Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) surged over 3% after the company reached a preliminary agreement with its employees to end a five-week strike. Adding to the momentum, Emirates SkyCargo placed an order for five additional Boeing 777 freighters. </li>
<li>Kenvue Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KVUE#NYSE">KVUE</a>) shares jumped 6.5% following reports that activist investor Starboard Value has acquired a substantial stake in the company.</li>
<li>Cigna Group (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CI#NYSE">CI</a>) extended its losses on Monday, falling nearly 5% after a 5% decline on Friday, as investors continued to react negatively to reports of a potential merger with Humana Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HUM#NYSE">HUM</a>). Oppenheimer analysts weighed in on the situation, recommending that Cigna remain independent amid skepticism about the merger's strategic value and regulatory feasibility.</li>
</ul>
Read Now:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41431485/goldman-sachs-predicts-bleak-long-term-s-p-500-returns-as-market-concentration-hits">Goldman Sachs Predicts Bleak Long-Term S&amp;P 500 Returns As Market Concentration Hits &#8216;Highest Level In 100 Years&#8217;</a></li>
</ul>
Photo: Shutterstock

Equities

Currency ETFs

Forex

Tech

KVUE

Stocks Fall As Treasury Yields, Dollar Rise; Nvidia Hits Record Highs: What's Driving Markets Monday?

A semiconductor rally pushed the S&amp;P 500 to new all-time highs on Thursday, with strong earnings from Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TSM#NYSE">TSM</a>) boosting tech sentiment after a weak report from ASML Holding N.V. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ASML#NASDAQ">ASML</a>) <a href="https://www.benzinga.com/trading-ideas/technicals/24/10/41383732/stock-of-the-day-taiwan-semiconductor-breaks-out-as-buyers-push-prices-higher">earlier in the week.</a>
The iShares Semiconductor ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NASDAQ">SOXX</a>) jumped 2.3%, leading sector gains. NVIDIA Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) hit fresh record highs, reaching $141 per share during the morning session.
The Nasdaq 100 outperformed major indices, while small caps underperformed as the Russell 2000 faced resistance at a key technical level. The Dow briefly touched a record high of 43,289 points before pulling back slightly.
On the macro front, September retail sales exceeded expectations, and jobless claims fell last week, reinforcing views of strong economic resilience. However, this also slightly hit hopes for Fed rate cuts as economists voiced doubts about the <a href="https://www.benzinga.com/economics/macro-economic-events/24/10/41386234/strong-september-retail-sales-put-feds-next-move-in-doubt-interest-rate-cuts-are-">need for further easing in November.</a>
The U.S. dollar strengthened, with the dollar index (DXY) climbing to levels last seen in early August. The euro fell 0.4% as the European Central Bank cut interest rates amid weak economic data and ongoing disinflation.
Gold prices, tracked by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), rose 0.5%, setting new records despite rising Treasury yields. The 10-year Treasury yield gained 8 basis points to 4.10%, while the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) slid 1.6%, marking its worst session since early August.
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) eased 0.4%, taking a breather after four consecutive sessions of gains.
<h1 class="wp-block-heading">Thursday&#8217;s Performance In Major U.S. Indices, ETFs</h1>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day % change</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>20,304.26</td>
<td>0.6%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,865.46</td>
<td>0.4%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>43,231.61</td>
<td>0.4%</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,279.25</td>
<td>-0.3%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12:50 p.m. ET</figcaption></figure>
According to <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent101724&amp;t=be2bearmibe3na1">Benzinga Pro</a> data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) rose 0.4% to $584.45.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;inched 0.4% higher to $432.52.</li>
<li>The tech-heavy Invesco QQQ Trust Series (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) soared 0.7% to $494.15.</li>
<li>The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) fell 0.4% to $226.02.</li>
<li>The Technology Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>) outperformed, up 1%. The Consumer Staples Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>) lagged, down 0.5%.</li>
</ul>
<h1 class="wp-block-heading">Thursday&#8217;s Stock Movers</h1>
<ul>
<li>Semiconductor stocks rallying Thursday on the heels of strong TSM earnings were Broadcom Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AVGO#NASDAQ">AVGO</a>), up 4%; Lattice Semiconductor Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LSCC#NASDAQ">LSCC</a>), up 4%; Micron Technology Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MU#NASDAQ">MU</a>), up 3.6% and Arm Holdings plc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ARM#NASDAQ">ARM</a>), up 3.1%.</li>
<li>Blackstone Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BX#NYSE">BX</a>) soared over 7% to fresh record highs after a strong quarterly report. </li>
<li>Other stocks reacting to company earnings included CSX Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CSX#NASDAQ">CSX</a>), down 6%; Kinder Morgan Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KMI#NYSE">KMI</a>), up 0.1%; Discover Financial Services (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DFS#NYSE">DFS</a>), up 2%; Equifax Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EFX#NYSE">EFX</a>), down 2.5%; Steel Dynamics Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/STLD#NASDAQ">STLD</a>), up 6%; Alcoa Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AA#NYSE">AA</a>), down 3%; Marsh &amp; McLennan Companies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MMC#NYSE">MMC</a>), up 0.1%; Elevance Health Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ELV#NYSE">ELV</a>), down 12%; Travelers Companies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TRV#NYSE">TRV</a>), up 8%; Truist Financial Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TFC#NYSE">TFC</a>), down 1.2%; M&amp;T Bank Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MTB#NYSE">MTB</a>), up 5%; Huntington Bancshares Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/HBAN#NASDAQ">HBAN</a>), down 1.8% and KeyCorp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KEY#NYSE">KEY</a>), down 1.5%.</li>
<li>Companies slated to report their earnings after the close include Netflix Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NFLX#NASDAQ">NFLX</a>), Intuitive Surgical Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ISRG#NASDAQ">ISRG</a>), Crown Holdings Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CCK#NYSE">CCK</a>) and Western Alliance Bancorporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WAL#NYSE">WAL</a>). </li>
</ul>
Read Now:
<ul>
<li><a href="https://www.benzinga.com/markets/asia/24/10/41385179/hamas-chief-oct-7-mastermind-yahya-sinwar-possibly-dead-idf-conducts-dna-tests-after-gaza-clash">Hamas Chief, Oct. 7 Mastermind Yahya Sinwar Possibly Dead: IDF Conducts DNA Tests After Gaza Clash</a></li>
</ul>
Photo: Shutterstock

Large Cap

Eurozone

Retail Sales

Small Cap

ASML

AVGO

streetTRACKS Dow Jones U.S. Large Cap Value Index Fund

HBAN

ISRG

LSCC

NFLX

iShares PHLX SOX Semiconductor Sector Index Fund

SOXX

STLD

Chipmakers Rally, Nvidia Smashes Records On TSMC Blowout Earnings, Gold Hits All-Time Highs: What's Driving Markets Thursday?

A sharp rise in September retail sales is sparking fresh debate among economists about the Federal Reserve's next move, as stronger-than-expected consumer resilience raises doubts about the need for <a href="https://www.benzinga.com/topic/interest-rates">further interest rate cuts.</a>
Retail sales rose 0.4% month-over-month in the last month of the quarter, far exceeding the 0.1% growth recorded in August and surpassing <a href="https://www.benzinga.com/news/retail-sales/24/10/41379775/september-retail-sales-exceed-estimates-jobless-claims-fall-more-than-expected">economists' forecasts of 0.3%</a>. Even more notably, excluding volatile sectors like autos and gasoline, sales surged by 0.7%, marking the second-largest increase over the past 12 months.
The stronger-than-expected sales report is pushing analysts to rethink whether the Federal Reserve will move forward with another interest rate cut in November. While market participants overwhelmingly anticipate a 25 basis point reduction following the 50-basis-point move last month, the latest economic data may complicate that outlook.
<h3 class="wp-block-heading">Economists Debate On Fed Interest Rates</h3>
Quincy Krosby, chief global strategist at LPL Financial, said, "Retail sales came in well above expectations and continue to defy the weak economy thesis."
Krosby added that the key question for monetary policy is whether the Fed will be concerned that the economy&#8217;s renewed strength could drive inflation higher.
However, she expects that a 25-basis-point cut will occur, especially if hurricane damage significantly impacts the labor market.
Speaking to CNBC, Stifel chief economist Lindsey Piegza said, &#8220;I think this was a very strong number and underscores the notion that the Fed maybe took too big of a step out of the gate with that 50 basis point cut.&#8221; Looking ahead, Piegza explained that there's a stronger argument for a more patient approach, potentially holding off on a November cut.
Kathy Bostjancic, chief economist at Nationwide, also commented on the retail data: &#8220;That&#8217;s positive, right, for the overall economy. It&#8217;s really big consumer spending buoying the overall GDP growth in the US.&#8221;
Regarding the next Fed moves, Bostjancic added that &#8220;it&#8217;s not a slam dunk that they will cut rates.&#8221;
LPL Financial's chief economist Jeffrey Roach maintains that the Fed will proceed with gradual cuts.
"Strong consumer spending in September suggests economic growth in the previous quarter was solidly above trend. Looking ahead, investors need to monitor any signs that the unemployed are finding it more difficult to earn a paycheck. Our baseline remains that the Fed will likely cut a quarter of a percent in both November and December." Roach said.
Investors still largely anticipate a cut at the upcoming Fed meeting. Market-implied odds of a 25-basis-point rate cut in November dipped only slightly from 94% to 87% on Thursday. 
<h3 class="wp-block-heading">Market Reactions: Treasury Yields Rise, Gold Hits Record Highs</h3>
Stronger-than-expected retail sales data, combined with a drop in unemployment claims, sparked a sharp rise in Treasury yields on Thursday, putting the brakes on further stock market gains. 
The yield on the 10-year Treasury jumped 8 basis points to 4.10%, while the 30-year yield surged 9 basis points to 4.39%. This spike in yields hit Treasury-related assets hard, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) tumbling 1.5%. The surge in Treasury yields weighed on investor risk sentiment.
After opening 0.6% higher to fresh record highs, the S&amp;P 500 was up just 0.3% by 12:15 p.m. in New York. The tech-heavy Nasdaq 100, tracked by the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), which had risen over 1% at the open, was up 0.7% at the time of publication.
Meanwhile, gold prices, as tracked by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), rose 0.7%, hitting new all-time highs.
Read Next:
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<li><a href="https://www.benzinga.com/news/24/10/41383055/china-launches-probe-into-intel-cites-national-security-risks-amid-trade-tensions-with-us">China Launches Probe Into Intel, Cites National Security Risks Amid Trade Tensions With US</a></li>
</ul>
Image created using artificial intelligence via Midjourney.

Strong September Retail Sales Put Fed's Next Move In Doubt: Interest Rate Cuts Are 'Not A Slam Dunk'

Now that the stock market is going into a new trend and cycle, sparked by the recent Federal Reserve (the Fed) interest rate cuts initiating a potential money shift over the next few quarters, investors might start to prefer safer spaces and stocks to put their capital into. Among all these preferences, the income aspect could make it to the top of the list now.
This is because, as interest rates come down, savings account yields could also decrease significantly. Seeing this change in liquid capital funds and accounts could lead investors to new stocks with attractive yields through dividend payments. It is important to get ahead of the trend through today&#39;s stock list before they become popular and the yield is not there tomorrow.
Bonds are now back above a 4% annual yield for the ten-year treasury bond, which may not last long since they were below 3.8% even before the Fed cut interest rates, so buying into the iShares 20+ Year Treasury Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tlt#NASDAQ">TLT</a>) can be a good idea. Then there is the real estate sector, known for its stability and rental income. Stocks like Realty Income Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/o#NYSE">O</a>) and Simon Property Group Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spg#NYSE">SPG</a>) come as a prime choice for high dividends.
<h2>Lock in Today&#39;s Bond Yields with This High-Yield ETF Before They&#39;re Gone</h2>
Now that this bond ETF has traded down by over 10% from its 52-week high of roughly $101.5 a share, investors have a new opportunity to get in a lock their dividend yields through treasury bonds, arguably one of the safest and most reliable ways to collect dividend payouts.
At today&#39;s price, the ETF&#39;s annual payout of $3.65 a share would translate into an annualized dividend yield of up to 3.86% to beat inflation and be above U.S. GDP growth. More than that, now investors know the ETF offers a double-digit upside on top of this reliable dividend to sweeten the deal.
There has also been some institutional interest in this ETF lately. Knowing that the Fed will likely continue to cut interest rates in the next few meetings, bringing yields lower and bond prices higher, investors are likely looking to lock in not only today&#39;s prices but also today&#39;s yields.
Those at Northwestern Mutual Wealth Management decided to boost their holdings in the ETF by as much as 2,810% as of August 2024, netting their position at $2.99 billion today or 5.5% ownership in the entire ETF. More than that, Stanley Druckenmiller (who is responsible for George Soros&#39; returns) has also rotated his profits from NVIDIA Co.&nbsp;into this ETF.
<h2>Realty Income: Inflation-Beating Monthly Dividend for Consistent Returns</h2>
Shares of Realty Income, one of the few real estate investment trusts (REITs) that offer a monthly dividend payment, offer a chance to lock in a reliable monthly income. Even though the stock trades at its 52-week high, some on Wall Street believe there is still some upside left.
Analysts at Stifel Nicolaus have reiterated their &quot;Buy&quot; ratings on Realty Income stock, a view coupled with a price target of up to $70.25 a share. This directly calls for as much as 13.7% from where it trades today, not to mention a new yearly high for the stock.
Through the portfolio&#39;s stability and rental income, management now offers an annual dividend payout of $3.16 a share, or an annualized yield of 5.1%, which is near the highest recorded yield of 6.6%. Like any other investor looking to lock in stable and attractive income sources, some institutional buyers decided to add to their Realty Income stock positions.
As of August 2024, Legal &amp; General Group boosted its holdings by 4.5%, an allocation that brought its net investment in Realty Income stock up to $467.5 million today, or 1.4% ownership in the REIT. Based on this property portfolio&#39;s quality and growth, broader markets are also stepping up to the plate.
Compared to the rest of the REIT industry&#39;s average 38.3x P/E valuation, Realty Income stock trades at a much higher 57.0x multiple today. This shows a willingness to overpay from the overall market, which is always a good sign for bulls.
<h2>Institutions Lead the Charge on Simon Property Group Stock Ahead of Market Moves</h2>
Over the past quarter, Simon Property Group stock has seen a few institutional buyers come in to lock in the high dividend yield offered today. This is another REIT trading at its 52-week high to show investors that momentum has been on its side during the past few weeks, but some think there could be more.
Knowing that lower interest rates could spark new trends in the consumer discretionary sector, which make up for all the tenants at Simon&#39;s properties, management feels comfortable paying a $8.20 a share dividend per year. At today&#39;s price, this payout would translate into an annual dividend yield of up to 4.85% today to also beat inflation rates and GDP growth.
Those at HSBC Holdings felt it was the right time to boost their holdings in the REIT by 6.7% as of August 2024, bringing their net position to $162.7 million today. Getting ahead of the curb is common for institutions this big, but they weren&#39;t alone in their bullish views.
Analysts at Piper Sandler recently set a price target of $175 a share for Simon Property Group, calling for a net upside of 3.5% from today&#39;s price. This view is coupled with Evercore&#39;s new &quot;Outperform&quot; rating, which has a $172 price target.
The article &quot;<a href="https://www.marketbeat.com/stock-ideas/3-high-yield-stocks-to-lock-in-steady-income-this-quarter/">3 High-Yield Stocks to Lock in Steady Income This Quarter</a>&quot; first appeared on MarketBeat.

News

Dividends

Price Target

Management

Analyst Ratings

Trading Ideas

3 High-Yield Stocks to Lock in Steady Income This Quarter

To gain an edge, this is what you need to know today.
<figure class="wp-block-image size-large is-resized"><img decoding="async" src="https://thearorareport.com/wp-content/uploads/2024/10/2024-10-14_08h36_20.png" alt="" style="width:624px" /></figure>
<h3 class="wp-block-heading">Bonds Defy Expectations</h3>
Please <a href="https://thearorareport.com/chart-analysis-stock-market-bonds-earnings-season-tlt-mc-10142024">click here</a> for an enlarged chart of 20+ year Treasury bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>).
Note the following:
<ul>
<li>Long bonds are defying expectations in the market.</li>
<li>The chart shows when the Fed cut interest rates by 50 bps. At that time, TLT had shown a technical breakout. The expectations were for TLT to go higher.</li>
<li>The chart shows the contrary Arora call that TLT would likely go down.</li>
<li>We recently wrote:</li>
</ul>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">In The Arora Report analysis, if it was not for the Middle East conflict escalation, TLT would have already fallen into the top support zone.
</blockquote>
<ul>
<li>The chart shows that The Arora Report call has been spot on.&nbsp; TLT has now hit the top band of the support zone.</li>
<li>What happens next to long bonds will come down to the election. The prevailing consensus is that there will be a divided government. A divided government will be good for both stock and bond markets. If one party sweeps, there will be a high probability of TLT hitting the lower support zone.</li>
<li>Bonds offer competition to stocks. Rising yields also lower PEs. For the time being, the stock market is drunk on the momentum generated by the 50 bps cut instead of a 25 bps cut.  When the momentum wanes, the stock market will start paying attention to rising yields.</li>
<li>Prudent investors should note that so far the data has not been supportive of the Fed's decision to cut interest rates by 50 bps.</li>
<li>Earnings season is in full swing. Earnings season will be a tell for AI. Undoubtedly, almost every company will hype AI.  In the prior quarters, the stock of almost every company that mentioned AI ran up. Here is the key question: Will the stocks run again just on the mention of AI or will the market look for hard data regarding AI?</li>
<li>After the weekend pump, the momo crowd buying in stocks in the early trade is aggressive.</li>
<li>Traders are fixated on S&amp;P 6000 as the magnet.</li>
</ul>
<h3 class="wp-block-heading">China</h3>
In a Saturday briefing, China did not offer new economic stimulus China also did not provide specific numbers as most investors had expected.
<ul>
<li>Foreign investors are disappointed and selling Chinese stocks.</li>
<li>Local investors are satisfied and buying Chinese stocks.</li>
</ul>
<h3 class="wp-block-heading">Magnificent Seven Money Flows</h3>
In the early trade, money flows are positive in Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Amazon.com, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), Alphabet Inc Class C (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>), Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>), Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), NVIDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), and Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>).
In the early trade, money flows are positive in SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>).
<h3 class="wp-block-heading">Momo Crowd And Smart Money In Stocks</h3>
Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).  The most popular ETF for silver is iShares Silver Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLV#NYSE">SLV</a>).  The most popular ETF for oil is United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>).
<h3 class="wp-block-heading">Bitcoin</h3>
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) is seeing buying for two reasons:
<ul>
<li>Trump has moved up in the polls. Trump is considered more bitcoin friendly.</li>
<li>Foreign speculators who are selling Chinese stocks are putting the money in bitcoin.</li>
</ul>
<h3 class="wp-block-heading">Protection Band And What To Do Now</h3>
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.  If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.&nbsp; A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.&nbsp; When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.&nbsp; High beta stocks are the ones that move more than the market.
<h3 class="wp-block-heading">Traditional 60/40 Portfolio</h3>
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.&nbsp; Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever <a href="https://thearorareport.com/generate-wealth-newsletter-benzinga">Generate Wealth Newsletter</a>.

Bonds Defy Expectations, Earnings Season Will Be A Tell For AI

Price pressures on U.S. producers jumped unexpectedly in September, mirroring a similar trend observed in consumer inflation data <a href="https://www.benzinga.com/economics/macro-economic-events/24/10/41270761/september-inflation-hotter-than-expected-jobless-claims-spike-the-most-in-over-a-">reported a day earlier.</a>
The Producer Price Index (PPI) rose more sharply than anticipated in September, and the August reading was upwardly revised. Core producer prices — excluding energy and food — also climbed more than forecasted.
Prior to the release of the PPI report, traders had assigned a nearly 85% chance of a 25-basis-point interest rate cut in November.
<h3 class="wp-block-heading">September Producer Price Index Report: Key Highlights</h3>
<ul>
<li>Headline PPI for final demand rose by 1.8% year-over-year in September, down from an upwardly revised 1.9% in August. This outcome was slightly above economist expectations of 1.6%, as tracked by TradingEconomics.</li>
<li>On a monthly basis, PPI flattened, decelerating from August&#8217;s reading and coming in below the forecasted 0.1% increase.</li>
<li>Food costs soared by 1% month-over-month, recording the largest increase since February. </li>
<li>A significant factor in the September rise in prices for final demand services was a 3% increase in the index for deposit services.</li>
<li>Other contributing indexes included machinery and vehicle wholesaling, furniture retailing, software publishing for desktop and portable devices, apparel wholesaling, and airline passenger services, all of which saw gains</li>
<li>Core PPI soared to 2.8% year-over-year in September, up from August&#8217;s 2.4% and slightly above market expectations of 2.7%.</li>
<li>On a month-over-month basis, core PPI rose 0.2%, down from August&#8217;s 0.2% pace and matching forecasts.</li>
</ul>
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>PPI Metrics</th>
<th>September 2024</th>
<th>August 2024</th>
<th>Econ. consensus</th>
</tr>
</thead>
<tbody>
<tr>
<td>Headline PPI (YoY)</td>
<td>1.8%</td>
<td>1.9% (upwardly revised from 1.7%)</td>
<td>1.6%</td>
</tr>
<tr>
<td>Headline PPI (MoM)</td>
<td>0.0%</td>
<td>0.2%</td>
<td>0.1%</td>
</tr>
<tr>
<td>Core PPI (YoY)</td>
<td>2.8%</td>
<td>2.4%</td>
<td>2.7%</td>
</tr>
<tr>
<td>Core PPI (MoM)</td>
<td>0.2%</td>
<td>0.3%</td>
<td>0.2%</td>
</tr>
</tbody>
</table>
</figure>
<h3 class="wp-block-heading">Market Reactions</h3>
November interest rate cut expectations a marginal downward move after the release. 
The U.S. dollar index (DXY), tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), as Treasury yields inched higher.
Notably, 30-year yields were up by 5 basis points to 4.41%, the highest since late July. As such, the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) was 0.7% lower during the premarket trading in New York, eyeing a 10-week low. 
Futures on the S&amp;P 500 were unchanged, while contracts on the tech-heavy Nasdaq 100 eased 0.2%. On Wednesday, , the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) closed 0.2% lower. 
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41281645/18-stocks-to-buy-7-to-sell-this-earnings-season-goldman-sachs-calls-it-the-year-of-">18 Stocks To Buy, 7 To Sell This Earnings Season: Goldman Sachs Calls It &#8216;The Year Of The Stock Picker&#8217;</a></li>
</ul>
Photo via Shutterstock.

Producer Inflation Rises More Than Expected In September As Food, Transportation Costs Jump

To gain an edge, this is what you need to know today.
<figure class="wp-block-image size-large is-resized"><img decoding="async" src="https://thearorareport.com/wp-content/uploads/2024/10/2024-10-08_08h03_18.png" alt="" style="width:624px" /></figure>
<h3 class="wp-block-heading">Biggest Stock Moves Ahead</h3>
Please <a href="https://thearorareport.com/chart-analysis-stock-market-rising-yields-neutral-rate-tlt-mc-10082024">click here</a> for an enlarged chart of iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>).
Note the following:
<ul>
<li>TLT moves inverse to the yield. The higher the yield goes, the lower TLT falls.</li>
<li>The chart shows the move up in TLT in anticipation of Fed rate cuts.</li>
<li>The chart shows a breakout above the resistance zone.</li>
<li>The chart shows when the Fed cut rates.</li>
<li>The chart shows that the spot on Arora call was made on the same day that the Fed cut interest rates. The Arora call was made in advance of the Fed announcement, giving investors more time to act. The Arora call was that yields were likely to rise on long bonds, sending TLT lower. The Arora call was a contrary call squarely going against the prevailing wisdom at that time. At that time, the following described the landscape.
<ul>
<li>Technically oriented investors were buying TLT because of the technical breakout.</li>
<li>Macro investors were buying TLT because of the rate cut. Going into the Fed meeting the consensus was still a 25 bps cut, even though the idea of a 50 basis point rate cut was gaining steam.</li>
<li>The prevailing wisdom in the market was that TLT would go up.</li>
</ul>
</li>
<li>The chart shows that the breakout failed, and TLT has experienced a significant drop since the Arora call.</li>
<li>The chart shows that TLT is now getting closer to the top support zone.</li>
<li>The down move in TLT is remarkable because during this time, the money has been flowing into the safety of long Treasury bonds due to escalating conflict in the Middle East. In The Arora Report analysis, if it was not for the Middle East conflict escalation, TLT would have already fallen into the top support zone.</li>
<li>RSI on the chart shows that TLT is oversold. An oversold ETF often bounces.</li>
<li>In The Arora Report analysis, unless the economic data changes or a war breaks out, or the Fed changes its course, any rally in TLT has a 70% probability of failing. The reason behind this prediction is that irrespective of who is elected, Trump or Harris, the government's borrowing and spending is going to go up. Higher borrowing means a larger supply of Treasuries.  A larger supply of Treasuries indicates a higher yield on long bonds. If the U.S. has a divided government after the election, the borrowing will be less than it will be if either party sweeps. In the event of a one party sweep, TLT can potentially fall to the bottom support zone.</li>
<li>Investors should also pay attention to the10 year Treasury yield.  The 10 year Treasury yield is important because it is the reference rate for computing appropriate PE ratios in most models. In general, the rule is higher interest rates mean lower PE ratios. There are two reasons for this:
<ul>
<li>When interest rates are higher, the value of future earnings discounted to present is lower.</li>
<li>When bonds start paying higher interest rates, they offer more competition to stocks.</li>
</ul>
</li>
<li>The yield on 10 year Treasuries has risen from 3.68% on the day the Fed cut the interest rate to 4.031% as of this writing.</li>
<li>Contrary to expectations in the market, mortgage rates have also risen since the Fed rate cut.</li>
<li>Investors should also pay close attention to the neutral rate. The neutral rate is the Fed funds rate that is neither restrictive or expansionary.
<ul>
<li>In addition to the neutral rate, investors should also pay attention to the pace at which interest rates come down to the neutral rate.</li>
<li>The Fed is indicating that the neutral rate might be around 3.4% in 2025. Previously, the Fed was pointing to a long run neutral rate of 2.5%.</li>
<li>The prevailing wisdom in the market is that the neutral rate is in the range of 2.5% &#8211; 3.5%.</li>
</ul>
</li>
<li>Regarding the neutral rate, The Arora Report has another contrary call. Unless economic data substantially changes or geopolitical conditions substantially change, the likely neutral rate is higher than the market consensus. In The Arora Report analysis, the likely neutral rate is 3.25 &#8211; 4.25%. </li>
<li>The foregoing discussion on the long bond rate, 10 year rate, and neutral rate is very important because in view of The Arora Report analysis and contrary calls, earnings will have to be very robust for the stock market to advance from here and sustain at a higher level.</li>
<li>In The Arora Report analysis, implied volatility of options on popular individual stocks around earnings indicates that the biggest moves after earnings in recent years in individual stocks are ahead. This has two practical implications for investors:
<ul>
<li>This will provide more opportunities for prudent investors who are set up to systematically take advantage of volatility in a proven way instead of being afraid of volatility.</li>
<li>Some of the existing positions in portfolios may be hit hard. To balance it with stocks that move up significantly, it is important to make sure the portfolio is properly diversified.</li>
</ul>
</li>
<li>In The Arora Report analysis, prior to the jobs report, the probability of a 50 bps cut after the next Fed meeting was about 30%. Now, the probability has dropped to 5%.</li>
<li>Based on The Arora Report proprietary sentiment indicator, sentiment in the stock market is very positive.&nbsp; S&amp;P 500 at 6000 is the magnet for traders.&nbsp;&nbsp;</li>
<li>Based on The Arora Report's proprietary methodology, numerous short squeezes are taking place, adding to the upside moves in individual stocks.</li>
<li>There is renewed excitement in AI stocks. The main reason is that NVIDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) AI Summit is taking place.</li>
<li>There is also buying ahead of Advanced Micro Devices, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMD#NASDAQ">AMD</a>) analyst meeting about AI on October 10.&nbsp; Hewlett Packard Enterprise Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HPE#NYSE">HPE</a>) will also highlight its progress on AI during its analyst day on October 10.</li>
<li>Adding to excitement in the stock market is the upcoming Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) robotaxi event on October 10.</li>
<li>Consumer Price Index (CPI) will be released on October 10. Headline CPI consensus is 0.1%.  Core CPI consensus is 0.2%.</li>
<li>Hurricane Milton is barreling towards Florida.&nbsp; Insurance stocks such as Universal Insurance Holdings, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UVE#NYSE">UVE</a>), Heritage Insurance Holdings Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HRTG#NYSE">HRTG</a>), and HCI Group Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HCI#NYSE">HCI</a>) are seeing selling pressure.&nbsp; Generator manufacturer Generac Holdings Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GNRC#NYSE">GNRC</a>) is seeing buying pressure, so are roofing stocks such as Beacon Roofing Supply Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BECN#NASDAQ">BECN</a>) and Owens Corning (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OC#NYSE">OC</a>).</li>
<li>Volatility index (VIX) continues to stay high on anxiety about the Middle East. VIX is elevated at 22 as of this writing.</li>
<li>As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. &nbsp; Please scroll down to see the protection band. The protection band is one of the large number of unique edges that are available to members of The Arora Report.</li>
</ul>
<h3 class="wp-block-heading">China Disappoints</h3>
We have been sharing with you day by day the epic rally in Chinese stocks and the reasons behind it. Today, at the beginning, hopes were high as Mainland China investors returned after a one week holiday.  Mainland benchmark stock index CSI 300 jumped 11% at the open but subsequently lost some of the gains, finishing up 5.9%.  In spite of the pullback, CSI 300 is up about 30% over the last month.
In Hong Kong, Hang Seng lost 9.41%. This is the biggest drop since the 2008 financial crisis. Stocks in Hong Kong were trading during the mainland holiday. The reason for the disappointment is that investors were counting on the National Development and Reform Commission (NDRC) to offer concrete stimulus measures at a briefing. However, the chair of NDRC Zheng Shanjie did not offer new concrete stimulus steps. This disappointed traders.
As full disclosure, for those who understand the China risk, The Arora Report&#8217;s plan continues to be to buy Mainland China ETF Xtrackers Hvst CSI 300 China A Shs ETF Class A (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ASHR#NYSE">ASHR</a>) and Hong Kong ETF iShares China Large-Cap ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXI#NYSE">FXI</a>) when they fall in the recently updated buy zones in The Arora Report&#8217;s ZYX Emerging.
<h3 class="wp-block-heading">Magnificent Seven Money Flows</h3>
In the early trade, money flows are positive in Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Amazon.com, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), Alphabet Inc Class C (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>), Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>), Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), NVDA, and TSLA.
In the early trade, money flows are neutral in Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>).
In the early trade, money flows are positive in SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>).
<h3 class="wp-block-heading">Momo Crowd And Smart Money In Stocks</h3>
Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).  The most popular ETF for silver is iShares Silver Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLV#NYSE">SLV</a>).  The most popular ETF for oil is United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>).
<h3 class="wp-block-heading">Bitcoin</h3>
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) is range bound.
<h3 class="wp-block-heading">Protection Band And What To Do Now</h3>
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.  If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash. A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.&nbsp; When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.&nbsp; High beta stocks are the ones that move more than the market.
<h3 class="wp-block-heading">Traditional 60/40 Portfolio</h3>
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.&nbsp; Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever <a href="https://thearorareport.com/generate-wealth-newsletter-benzinga">Generate Wealth Newsletter</a>.

ASHR

BECN

GNRC

HRTG

Rising Yields And Higher Neutral Rate May Spoil The Party, Biggest Stock Moves In Years Ahead

Wall Street started the week in the red, as traders weighed the economic and geopolitical fallout from escalating tensions in the Middle East. 
Monday marked the one-year anniversary of Hamas&#8217; October 7 attack, which triggered the <a href="https://www.benzinga.com/etfs/specialty-etfs/24/10/41210761/oil-surges-on-1-year-hamas-attack-anniversary-as-israel-mulls-iran-retaliation">ongoing war in Gaza</a>. The situation is now threatening to spread across the region, as Israel considers retaliating for last week&#8217;s missile attacks from Iran.
By 1 p.m. ET, the major indices were modestly lower, with the S&amp;P 500 down 0.5% and the Dow Jones off by 0.7%. The Nasdaq 100 also slid 0.5%. The energy sector was the only bright spot, buoyed by surging oil prices.
West Texas Intermediate (WTI) crude, as tracked by the United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), jumped over 3%, climbing to $77 per barrel. This rally marked its fifth consecutive session of gains, fueled by concerns that Israel may retaliate against Iran, a key oil producer, for its involvement in regional conflicts.
Last week&#8217;s blowout U.S. labor market data, coupled with rising oil prices and fresh stimulus measures out of China, pushed 10-year Treasury yields above 4%, setting the stage for the highest levels since late July. Investors appear increasingly wary of long-duration bonds, sending the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) down 0.6%, extending its losing streak to four sessions.
Market sentiment around the Federal Reserve&#8217;s upcoming policy decisions has also shifted. The probability of the Fed refraining from cutting interest rates next month has dropped to just 17%, according to CME FedWatch Tool, 
Rising yields weighed heavily on metals, with gold down 0.4% to $2,645 per ounce and silver dropping 1.3%. Meanwhile, Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) gained 1.4%, trading at $63,682. 
<h1 class="wp-block-heading">Monday&#8217;s Performance In Major U.S. Indices, ETFs</h1>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>Chg %</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,724.31</td>
<td>-0.5%</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>19,930.58</td>
<td>-0.5%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>42,059.07</td>
<td>-0.7%</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,191.35</td>
<td>-0.8%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 1:30 p.m. ET</figcaption></figure>
According to <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent100724&amp;t=be2bearmibe3na1">Benzinga Pro</a> data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)&nbsp;edged down 0.5% to $570.38.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;fell 0.7% to $420.90.</li>
<li>The tech-heavy Invesco QQQ Trust Series (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) fell 0.5% to $485.21.</li>
<li>The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) tumbled 0.8% to $218.77.</li>
<li>The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) outperformed, up 0.8%. The Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>) lagged, down 1.7%.</li>
</ul>
<h1 class="wp-block-heading">Monday&#8217;s Stock Movers</h1>
<ul>
<li>Super Micro Computer Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SMCI#NASDAQ">SMCI</a>) rallied 14% after the company announced it is currently shipping more than 100,000 graphics processors per quarter and unveiled a new suite of liquid cooling products.</li>
<li>Everest Group Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EG#NYSE">EG</a>) plummeted over 8% after Morgan Stanley lowered its price target on the stock from $450 to $430.</li>
<li>Constellation Brands Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STZ#NYSE">STZ</a>) fell nearly 2% after Bank of America downgraded the stock from Outperform to Neutral and lowered the price target from $300 to $255. </li>
<li>Bank of America also downgraded several healthcare stocks including Concentra Group Holding Parent Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CON#NYSE">CON</a>), down 4.6%; AMN Healthcare Services Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AMN#NYSE">AMN</a>), down 1.9%; Brookdale Senior Living (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BKD#NYSE">BKD</a>), down 6% and U.S. Physical Therapy Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USPH#NYSE">USPH</a>), down 2.5%.</li>
</ul>
Read Now:
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/10/41207490/s-p-500-could-reach-6-300-in-12-months-says-goldman-sachs-driven-by-strong-ai-demand-and-margin-">S&amp;P 500 Could Reach 6,300 In 12 Months, Says Goldman Sachs, Driven By &#8216;Strong AI Demand&#8217; And &#8216;Margin Expansion&#8217;</a></li>
</ul>
Image was created using artificial intelligence.

Global

SMCI

USPH

XLRE

Stocks Fall As Oil Prices Spike, 10-Year Yields Top 4%, Energy Sector Outperforms: What's Driving Markets Monday?

A hotter-than-expected jobs report spurred a premarket rally on Wall Street Friday, showcasing the U.S. economy&#8217;s resilience and easing concerns <a href="https://www.benzinga.com/economics/macro-economic-events/24/10/41184080/us-economy-adds-254-000-new-jobs-in-september-smashes-expectations-unemployment-f">over an economic slowdown. </a>
The strong labor data also led traders to rethink the Federal Reserve&#8217;s aggressive rate cuts, resulting in a jump in the dollar and Treasury yields.
What Happened: The U.S. economy added 254,000 jobs in September, far exceeding the expected 140,000. This marks an acceleration from August&#8217;s 159,000 figure and well above the 12-month average of 230,000. Payrolls for both July and August were upwardly revised by 55,000 and 17,000, respectively.
Private sector payrolls accounted for 223,000 jobs, while the government added 31,000. The unemployment rate fell unexpectedly by 0.1% to 4.1%, beating the forecasted 4.2%.
Wages grew by 0.4% in September, surpassing the expected 0.3%. 
Why It Matters: The stronger-than-expected pace of job addition, coupled with a surprisingly lower unemployment rate and higher wage growth, signals a strong consumer spending outlook, which could lift corporate earnings, particularly as we head into the fourth quarter.
Yet the labor market&#8217;s strength also complicates the Federal Reserve&#8217;s efforts to curb inflation. Higher wages could stoke consumer demand, putting upward pressure on prices, potentially slowing disinflation efforts. This may lead the Fed to delay or scale back anticipated interest rate cuts.
Before the jobs report, the market had priced in a 30% chance of a 50-basis-point rate cut in November, according to the CME FedWatch Tool. Following the data release, those odds plummeted to 11%. 
<h3 class="wp-block-heading">Market Reactions:</h3>
<ul>
<li>The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) jumped 0.9% in premarket trading, edging closer to its recent record highs.</li>
<li>The Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), which tracks major tech stocks, rallied 1.4%, driven by strong gains in the semiconductor sector. The iShares Semiconductor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NYSE">SOXX</a>) surged 2.1%.</li>
<li>Blue chips rose as well, with the SPDR Dow Jones Industrial Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) up by 0.7%.</li>
<li>Small caps outperformed large caps. The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) rallied 1.7%. </li>
<li>Yields on the 10-year Treasury bond soared by 11 basis points to 3.96%. Yields on the policy-sensitive two-year note spiked by 15 basis points to 3.87%.</li>
<li>The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) tumbled 1.2%. </li>
<li>The U.S. Dollar Index, which is tracked by the&nbsp;Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), rose 0.7%.</li>
</ul>
<h3 class="wp-block-heading">Top Gainers Post-Jobs Report:</h3>
Using the Movers function on <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent100424&amp;t=be2bearmibe3na1">Benzinga Pro</a>, here are the top performers among U.S. mega-cap stocks in the 30 minutes following the release of the September jobs data.
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Company Name</th>
<th>Price</th>
<th>Change</th>
</tr>
</thead>
<tbody>
<tr>
<td>KLA Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KLAC#NASDAQ">KLAC</a>)</td>
<td>$799.25</td>
<td>+3.18%</td>
</tr>
<tr>
<td>Mitsubishi UFJ Financial Group (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MUFG#NYSE">MUFG</a>)</td>
<td>$10.18</td>
<td>+3.18%</td>
</tr>
<tr>
<td>Applied Materials Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMAT#NASDAQ">AMAT</a>)</td>
<td>$205.53</td>
<td>+2.10%</td>
</tr>
<tr>
<td>Lam Research Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LRCX#NASDAQ">LRCX</a>)</td>
<td>$83.60</td>
<td>+2.08%</td>
</tr>
<tr>
<td>Advanced Micro Devices Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMD#NASDAQ">AMD</a>)</td>
<td>$166.90</td>
<td>+1.92%</td>
</tr>
<tr>
<td>ARM Holdings plc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ARM#NASDAQ">ARM</a>)</td>
<td>$142.44</td>
<td>+1.91%</td>
</tr>
<tr>
<td>Shopify Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SHOP#NYSE">SHOP</a>)</td>
<td>$80.02</td>
<td>+1.67%</td>
</tr>
<tr>
<td>Broadcom Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AVGO#NASDAQ">AVGO</a>)</td>
<td>$175.66</td>
<td>+1.66%</td>
</tr>
<tr>
<td>Adobe Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ADBE#NASDAQ">ADBE</a>)</td>
<td>$510.58</td>
<td>+1.59%</td>
</tr>
<tr>
<td>Bank of America Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BAC#NYSE">BAC</a>)</td>
<td>$39.96</td>
<td>+1.56%</td>
</tr>
<tr>
<td>Texas Instruments Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TXN#NASDAQ">TXN</a>)</td>
<td>$204.82</td>
<td>+1.56%</td>
</tr>
</tbody>
</table>
</figure>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/news/24/10/41182466/spirit-airlines-drops-over-40-amid-bankruptcy-discussions">Spirit Airlines Drops Over 40% Amid Bankruptcy Discussions</a></li>
</ul>
Photo via Shutterstock.

Movers

ADBE

AMAT

KLAC

LRCX

MUFG

SHOP

S&P 500 Nears Record Highs On Hot Jobs Data: Dollar, Treasury Yields Surge As Aggressive Interest Rate Cut Hopes Fade

To gain an edge, this is what you need to know today.
<figure class="wp-block-image size-large is-resized"><img decoding="async" src="https://thearorareport.com/wp-content/uploads/2024/10/2024-10-03_08h44_42.png" alt="" style="width:624px" /></figure>
<h3 class="wp-block-heading">Cognitive Dissonance</h3>
Please <a href="https://thearorareport.com/chart-analysis-stock-market-bonds-israel-strike-iran-tlt-mc-10032024">click here</a> for an enlarged chart of iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>).
Note the following:
<ul>
<li>The chart shows when the Fed rate cut was announced.</li>
<li>At the time the Fed rate cut was announced, this was the landscape:
<ul>
<li>Wall Street firms were tripping over themselves to rush their clients into buying long bonds.</li>
<li>The momo crowd was aggressively buying long bonds.</li>
<li>Technically, long bonds had broken out.</li>
<li>Trading services were sending signals to their members to go all in on buying long bonds.</li>
<li>Almost everyone was predicting that bond yields would fall much lower.</li>
</ul>
</li>
<li>Long bonds move inversely to the yield.&nbsp; When yield goes higher, long bonds fall.</li>
<li>On the morning before the Fed rate cut announcement, The Arora Report made a bold call contrary to the prevailing wisdom.  The call was inline with prior calls that long bond yields may rise and long bonds may fall after the rate cut.  We wrote:</li>
</ul>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">One unintended consequence may be a rise in long term yields in due course.
</blockquote>
<ul>
<li>The chart shows that long bonds have fallen and yields have risen.</li>
<li>The chart shows that the breakout above the resistance zone failed.&nbsp; Ironically, this breakout was the reason legions of investors who rely only on traditional technical analysis bought long bonds on the breakout. To make matters worse, most of such bond trading positions are taken on high leverage.&nbsp; Due to high leverage, these positions now have substantial losses.
<ul>
<li>This is a cautionary tale that illustrates why investors should not rely solely on one form of analysis such as traditional technical analysis. Investors should rely on systems, such as The Arora Report system, that synergistically combine in an optimized manner the best elements of the following:
<ul>
<li>Macro analysis</li>
<li>Fundamental analysis</li>
<li>Technical analysis</li>
<li>Quantitative analysis</li>
</ul>
</li>
</ul>
</li>
<li>Money is flowing into the safety of Treasuries due to anxiety about potential escalation of conflict in the Middle East.&nbsp; In The Arora Report analysis, if it was not for the escalation in the Middle East, TLT would have been much lower now.</li>
<li>Going forward, investors need to remember the probability adjusted risk reward ratio in long bonds is not great.  Long bonds will work only if there is a major recession or a major war breaks out.  However, investors need to remember that the stock market is counting on no recession. Investors are suffering from cognitive dissonance – they are buying stocks believing that there will not be a recession, they are buying bonds believing there will be a recession.</li>
<li>If inflation starts rising again, investors in long bonds will experience major losses.&nbsp; Investors are very short sighted and are also losing track of the fact that the election is not far away.&nbsp; Both Trump and Harris are committed to more reckless borrowing and more reckless spending.&nbsp; This will increase the supply of Treasuries.&nbsp; How can a higher supply of Treasuries be good for long bonds?&nbsp; The answer is that it is not good for long bonds.</li>
<li>On the positive side, NVIDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), CEO Jensen Huang says Blackwell production is in full swing and the demand for Blackwell is insane.</li>
<li>Also on the positive side, OpenAI has raised $6.6B in new funds at a valuation of $157B.&nbsp; This valuation is significantly higher than the last round.</li>
<li>Anxiety is building among investors regarding the upcoming strike on Iran by Israel.&nbsp; There are reports that Israel wants to attack Iran's nuclear installations, but Biden is trying to restrain Israel.</li>
<li>Initial jobless claims came at 225K vs. 223K consensus.&nbsp; Jobless claims are not showing weakness in the jobs picture.&nbsp; Powell saw weakness in the jobs picture, and that was one of his justifications for the 50 bps rate cut.&nbsp; More information will become available about the jobs picture tomorrow when the official jobs report is released at 8:30am ET.&nbsp; The jobs report has the potential to be a major market moving event.</li>
<li>ISM Non-Manufacturing Index will be released at 10am ET.&nbsp; The consensus is 51.6.&nbsp; This data may be market moving.</li>
</ul>
<h3 class="wp-block-heading">China</h3>
The stock buying stampede in Hong Kong is slowing.  Mainland markets are closed.  Prudent investors are taking advantage of the rally to sell.  As full disclosure, The Arora Report&#8217;s plan continues to be to buy on a dip.  The Arora Report has new buy zones for Mainland China ETF Xtrackers Hvst CSI 300 China A Shs ETF Class A (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ASHR#NYSE">ASHR</a>) and Hong Kong ETF iShares China Large-Cap ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXI#NYSE">FXI</a>) in The Arora Report&#8217;s ZYX Emerging.
<h3 class="wp-block-heading">India</h3>
Growth concerns are emerging in India.  Money is beginning to flow out of India and into China.  As full disclosure, The Arora Report has new signals on India ETF WisdomTree India Earnings Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EPI#NYSE">EPI</a>), VanEck India Growth Leaders ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLIN#NYSE">GLIN</a>), and iShares MSCI India Small-Cap ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/SMIN#BATS">SMIN</a>) in The Arora Report&#8217;s ZYX Emerging.
<h3 class="wp-block-heading">Magnificent Seven Money Flows</h3>
In the early trade, money flows are positive in NVDA.
In the early trade, money flows are neutral in Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>).
In the early trade, money flows are negative in Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Amazon.com, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), Alphabet Inc Class C (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>), Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>), and Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>).
In the early trade, money flows are negative in SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>).
<h3 class="wp-block-heading">Momo Crowd And Smart Money In Stocks</h3>
Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).  The most popular ETF for silver is iShares Silver Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLV#NYSE">SLV</a>).  The most popular ETF for oil is United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>).
<h3 class="wp-block-heading">Bitcoin</h3>
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) is seeing selling along with junk stocks.
<h3 class="wp-block-heading">Protection Band And What To Do Now</h3>
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges.&nbsp; The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.&nbsp; If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.&nbsp; A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.&nbsp; When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.&nbsp; High beta stocks are the ones that move more than the market.
<h3 class="wp-block-heading">Traditional 60/40 Portfolio</h3>
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.&nbsp; Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever <a href="https://thearorareport.com/generate-wealth-newsletter-benzinga">Generate Wealth Newsletter</a>.

GLIN

SMIN

Investors Suffering Cognitive Dissonance, Insane Demand For Nvidia Chips, Anxiety Builds About Israel And Iran

Economic activity in the U.S. services sector continued to expand in September, as the Services PMI reached 54.9%, its highest level since February 2023, <a href="https://www.benzinga.com/topic/pmi">marking a robust recovery</a>.
According to the Services ISM Report On Business released on Thursday, this increase of 3.4 percentage points from August's 51.5% reflects strong growth in business activity and new orders. 
The report raises concerns about how it may influence upcoming Federal Reserve rate cuts. With the services sector expanding for 49 of the last 52 months, the data suggests resilient demand, which could influence the Fed's decision on the size of the anticipated November cut.
According to the CME FedWatch tool, traders now see a 65.6% probability of a 25-basis point rate cut in November, with a 34.4% chance of a 50-basis point cut.
Also on Thursday, the S&amp;P Global US Services PMI Business Activity Index posted 55.2 in September. That&#8217;s slightly down from 55.7 in August. This marked the 20th consecutive month of expansion in services activity. New orders continued to rise solidly, although input prices increased at the joint-fastest pace in a year, driven by salary pressures and higher costs for manufactured goods.
Employment dropped for the second month, but companies remained cautious about hiring due to strong cost pressures. Business confidence declined sharply to its lowest level since October 2022 as concerns about an economic slowdown grew.
<h3 class="wp-block-heading">September ISM Services PMI Report: Key Highlights</h3>
<ul>
<li>The Services PMI rose to 54.9% in September, the highest reading since February 2023.</li>
<li>Business activity expanded significantly, with the Business Activity Index climbing to 59.9%.</li>
<li>The New Orders Index increased to 59.4%, up from 53% in August.</li>
<li>The Employment Index contracted to 48.1%, down from 50.2% in August.</li>
<li>The Supplier Deliveries Index returned to expansion, hitting 52.1%.</li>
<li>Panelists expressed concerns over political uncertainty and labor costs, despite positive supply chain improvements.</li>
</ul>
<h3 class="wp-block-heading">Experts React To September Data</h3>
Steve Miller, chair of the ISM Services Business Survey Committee, highlighted the continued expansion in services. "Twelve industries reported growth in September, up two from the 10 industries reporting growth in August,&#8221; he said.
&#8220;The Supplier Deliveries Index returned to expansion in September, indicating slower delivery performance,&#8221; Miller added. &#8220;The stronger growth indicated by the index data was generally supported by panelists' comments; however, concerns over political uncertainty are more prevalent than last month&#8221;
Chris Williamson, chief business economist at S&amp;P Global Market Intelligence, said, &#8220;U.S. service sector businesses reported a strong end to the third quarter, with output continuing to grow at one of the fastest rates seen over the past two-and-a-half years.&#8221; 
Still, he also noted that &#8220;companies have become increasingly concerned about the outlook… with business confidence slumping in September amid uncertainty caused by the upcoming election as well as perceptions of rising recession risks.&#8221;
<h3 class="wp-block-heading">Market Reactions</h3>
Markets were trading lower on Thursday following the data release.
The S&amp;P 500, tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), was trading 0.5% lower.
The U.S. dollar index (DXY), tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), was up 0.31%
Other major asset movements following the ISM Services PMI print included: 
<ul>
<li>The Nasdaq 100, as monitored through the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), was down 0.3%.</li>
<li>The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), tracking long-dated Treasuries, was down 0.63%.</li>
<li>Gold, as tracked by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), was down 0.3%.</li>
</ul>
Image created using artificial intelligence via Midjourney.

Services Sector Surges In September, Raising Questions For Fed's November Rate Cut

The stock market is about to make a major shift, this time driven by the shift in monetary policy set on by the Federal Reserve (the Fed). After the most recent meeting to decide the new path of interest rates for the United States, Jerome Powell (the Fed chairman) cut interest rates by the most aggressive pace in 16 years.
That means a few things for the stock market, but investors must understand that not all industries will be affected equally. The ones that deserve a second &ndash; or deeper &ndash; look are those that depend on consumer and financial trends, sectors like consumer discretionary and real estate. There&#39;s even a historical tendency for oil prices to do well on lower interest rates. Hence, the energy sector deserves a spot on this list as well.
Within these spaces, names like Nike Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/nke#NYSE">NKE</a>), Chesapeake Energy Co. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/chk#NASDAQ">CHK</a>), and even SoFi Technologies Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/sofi#NASDAQ">SOFI</a>) carry enough reasons to potentially become relative winners in the coming quarters, especially as money and investors begin to shift their preferences to match this new business cycle.
<h2>Consumer Stocks Like Nike Poised for a Comeback with Rate Cuts on the Horizon</h2>
Nike shares have been volatile recently, particularly after the company reported a less-than-spectacular quarter. Leaning on China slowdowns and weakening U.S. consumer sentiment, bears raided Nike stock after the results came out.
However, some on Wall Street saw far ahead enough to pick up this stock at its lows, such as billionaire hedge fund manager Bill Ackman. More than that, analysts at Sanford C. Bernstein see the stock as worth up to $109 a share, calling for up to 32.4% upside from where it trades today.
Reacting to the recent Wall Street bullishness and institutional buying, bears retreated from further selling this stock, as Nike stock&#39;s short interest declined by 14.5% in the past month alone. The stock still trades at only 67% of its 52-week high, leaving enough room for investors to catch a further recovery rally.
<h2>Energy Stocks Are Strong, But Chesapeake Stock Stands Out as the Better Pick</h2>
Over the past month, shares of Chesapeake have gone on a bit of a tear, rallying by as much as 7.5% as front-run expectations for Fed interest rate cuts started to influence the energy sector positively. One big investor who saw this trend coming is Warren Buffett.
Based on this belief, Buffett bought up to 29% of Occidental Petroleum Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/oxy#NYSE">OXY</a>), but retail investors have an advantage over mega investors like Buffett. They can choose smaller companies, especially those placed higher in the industry&#39;s value chain and paid first.
Chesapeake Energy stock is one example, and Wall Street knows this. Those at Stephens see a potential bull case in which this stock reaches a valuation of $118 a share, daring it to rally by as much as 53.6% from where it trades today. Considering Chesapeake is still only 83% of its 52-week high, investors have a new reason to call for new highs.
That reason is interest rate cuts, which typically help boost business activity and demand, which rely on oil for manufacturing and transport. As oil prices recover based on these trends, Chesapeake stock might be at the center of the bullish price action, given its place in the value chain for exploration and production.
<h2>Lower Mortgage Rates Could Propel SoFi Stock to New Heights</h2>
Many would-be home buyers are sitting on the sidelines, waiting for more affordable financing rates through more accessible mortgages. Investors should remember that when interest rates come down, so do mortgage rates, enabling new home buyers to enter the market.
This is where SoFi stock comes into play and why Wall Street holds it in such high regard. Now that the stock is down to 80% of its 52-week high, there are a few more tailwinds in place to let investors assume this name could make its way back and even make a new high.
Wall Street analysts forecast up to $0.07 in earnings per share (EPS) in SoFi stock for the next 12 months, up from today&#39;s EPS of $0.01. This is a seven-fold jump in profits, meaning some of the current price targets and valuations might have to be adjusted upward in face of this potential spike.
Those at Dimensional Fund Advisors saw enough reason to boost their holdings in SoFi stock by up to 263.3% as of August 2024, bringing their net investment to $86.5 million today, or 1.2% ownership in the company.
<h2>Wall Street&#39;s Latest Top Pick Comes from a Different Market</h2>
Stanley Druckenmiller (responsible for George Soros&#39; returns) decided to sell out of the U.S. technology sector and sought to relocate his winnings into the bond market. Remember how mortgage rates come down during Fed cuts? So do bond yields.
Just like any other fixed-income product, prices are inversely related to yield, so as bond yields come down, their prices will go up. Investors can copy Druckenmiller&#39;s playbook and check out the iShares 20+ Year Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tlt#NASDAQ">TLT</a>) for potential exposure.
The ETF has recently declined by roughly 3% from its highs. However, momentum is still bullish enough to suggest further upside from this level, especially as the Fed might keep cutting rates for the next 12 months, bringing the price of bonds higher and higher.
The article &quot;<a href="https://www.marketbeat.com/stock-ideas/4-stocks-set-to-benefit-from-recent-interest-rate-cuts/">4 Stocks Set to Benefit from Recent Interest Rate Cuts</a>&quot; first appeared on MarketBeat.

Earnings

Financing

SOFI

4 Stocks Set to Benefit from Recent Interest Rate Cuts

As the market anticipates the release of the August Personal Consumption Expenditures (PCE) report, the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) is sending clear signals <a href="https://www.benzinga.com/markets/bonds">for fixed-income investors</a>.
Since the Fed cut interest rates by 50 basis points last week, TLT's price has fallen by 1.77%. This suggests that investors had already anticipated the rate cut, and their focus has shifted to ongoing concerns about inflation not cooling as much as expected, which may be driving skepticism in the bond market.
<h2 class="wp-block-heading">How TLT May React To The PCE Report</h2>
Analysts are looking for a modest 0.1% increase in month-over-month inflation for August, with an annual figure expected at 2.3%. If the PCE report shows lower inflation than expected, TLT could see a boost in price.
However, if inflation readings come in higher than expected, TLT might face more downward pressure, raising concerns about future inflation.
Read Also: <a href="https://www.benzinga.com/markets/bonds/24/09/40993114/companies-run-to-bond-markets-after-last-weeks-fed-rate-cut">Companies Run To Bond Markets After Last Week&#8217;s Fed Rate Cut</a>
<h2 class="wp-block-heading">Short-Term Vs. Long-Term Bonds</h2>
The recent decline in TLT highlights the need for investors to see solid evidence that inflation is under control before committing to longer-term bonds.
Interestingly, the yield curve is steepening, which means investors might want to shift their focus from short-term investments to longer-term bonds.
For the first time in over two years, the yield on 10-year Treasuries has surpassed that of two-year Treasuries, signaling a potential trend shift.
According to Ian Lyngen, a strategist at BMO Capital Markets, this <a href="https://www.barrons.com/articles/treasuriy-bonds-bills-curve-steepener-d74efd5f">suggests</a> investors are becoming more aware of the risks associated with rising inflation, Barron&#8217;s reports.
<h2 class="wp-block-heading">Why The PCE Report Is Crucial To TLT Investors</h2>
For TLT investors, this PCE report is crucial. 
Keep an eye on the inflation numbers; lower readings could indicate a buying opportunity, while higher readings may prompt a reevaluation of bond holdings. 
As the market adjusts to these dynamics, staying informed and ready to act will be key for maximizing returns in TLT.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/government/24/08/40654794/inflation-is-becoming-boring-again-as-numbers-are-right-on-target-economists">Inflation Is &#8216;Becoming Boring Again&#8217; As Numbers Are &#8216;Right On Target&#8217;: Economists</a></li>
</ul>
Photo: Shutterstock

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