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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Financial.Velociraptor on December 03, 2018, 05:07:37 PM

Title: 10 year treasury - under 300bp
Post by: Financial.Velociraptor on December 03, 2018, 05:07:37 PM
The benchmark 10 year Treasury note closed today under 3.00% yield.  The bull might still have legs!
Title: Re: 10 year treasury - under 300bp
Post by: Financial.Velociraptor on December 03, 2018, 05:09:52 PM
The benchmark 10 year Treasury note closed today under 3.00% yield.  The bull might still have legs!

On the other hand, just saw this: https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html (https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html)
Title: Re: 10 year treasury - under 300bp
Post by: Steeze on December 03, 2018, 07:02:13 PM
Just click bait. Wait for 2yr yield greater than 10 yr yeild
Title: Re: 10 year treasury - under 300bp
Post by: COEE on December 03, 2018, 07:33:15 PM
Just click bait. Wait for 2yr yield greater than 10 yr yeild

Yep.
Title: Re: 10 year treasury - under 300bp
Post by: MustacheAndaHalf on December 04, 2018, 12:19:04 AM
That 3yr / 5yr yield isn't that useful, but it does show that the 2yr / 10yr might be close to inverting.  Plus the market believes the Fed is about to raise interest rates by +0.25%... but if the yield curve is almost inverted they might pause before doing that.  I take the article to mean "watch out for 2yr / 10yr yield inversion and possible signs of a recession".  But I don't think that's guaranteed.
Title: Re: 10 year treasury - under 300bp
Post by: Financial.Velociraptor on December 04, 2018, 11:27:24 AM
That clickbait article apparently spooked enough people that the DOW is off over 600 points in afternoon trading.
Title: Re: 10 year treasury - under 300bp
Post by: Boofinator on December 04, 2018, 11:57:38 AM
On the other hand, just saw this: https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html (https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html)

"An inverted yield curve is a sign investors think the government is less likely to pay back debt it owes in two years than what it owes in a decade or in this case, the government is less likely to pay in three years than it is in five."

Am I fundamentally misunderstanding this comment from the article, or is the author that clueless?
Title: Re: 10 year treasury - under 300bp
Post by: thd7t on December 04, 2018, 12:01:51 PM
That clickbait article apparently spooked enough people that the DOW is off over 600 points in afternoon trading.
I thought the selloff was happening because the trade deal with China wasn't taking shape.
https://www.washingtonpost.com/business/economy/i-am-a-tariff-man-trump-says-as-china-talks-show-signs-of-sputtering/2018/12/04/516425e4-f7e0-11e8-8c9a-860ce2a8148f_story.html?noredirect=on&utm_term=.ab47224bf5c5 (https://www.washingtonpost.com/business/economy/i-am-a-tariff-man-trump-says-as-china-talks-show-signs-of-sputtering/2018/12/04/516425e4-f7e0-11e8-8c9a-860ce2a8148f_story.html?noredirect=on&utm_term=.ab47224bf5c5)
Title: Re: 10 year treasury - under 300bp
Post by: Financial.Velociraptor on December 04, 2018, 12:15:42 PM
On the other hand, just saw this: https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html (https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html)

"An inverted yield curve is a sign investors think the government is less likely to pay back debt it owes in two years than what it owes in a decade or in this case, the government is less likely to pay in three years than it is in five."

Am I fundamentally misunderstanding this comment from the article, or is the author that clueless?

Author is clearly a journalism major.  Editor clearly did an  undergrad in Management/Marketing.  That is an enormously stupid assessment.
Title: Re: 10 year treasury - under 300bp
Post by: harvestbook on December 04, 2018, 01:53:31 PM
That clickbait article apparently spooked enough people that the DOW is off over 600 points in afternoon trading.
I thought the selloff was happening because the trade deal with China wasn't taking shape.
https://www.washingtonpost.com/business/economy/i-am-a-tariff-man-trump-says-as-china-talks-show-signs-of-sputtering/2018/12/04/516425e4-f7e0-11e8-8c9a-860ce2a8148f_story.html?noredirect=on&utm_term=.ab47224bf5c5 (https://www.washingtonpost.com/business/economy/i-am-a-tariff-man-trump-says-as-china-talks-show-signs-of-sputtering/2018/12/04/516425e4-f7e0-11e8-8c9a-860ce2a8148f_story.html?noredirect=on&utm_term=.ab47224bf5c5)

Al the dumb people who invested on nothing but a Tweet Monday are univesting today because of a different tweet
Title: Re: 10 year treasury - under 300bp
Post by: Rob_bob on December 04, 2018, 01:55:58 PM
On the other hand, just saw this: https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html (https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html)

"An inverted yield curve is a sign investors think the government is less likely to pay back debt it owes in two years than what it owes in a decade or in this case, the government is less likely to pay in three years than it is in five."

Am I fundamentally misunderstanding this comment from the article, or is the author that clueless?

A higher yield indicates higher risk so in this context it would mean short term is more risky than long term debt.

However who knows what is going on in the mind of the collective market that is driving yield fluctuations.
Title: Re: 10 year treasury - under 300bp
Post by: Boofinator on December 04, 2018, 03:07:04 PM
On the other hand, just saw this: https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html (https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html)

"An inverted yield curve is a sign investors think the government is less likely to pay back debt it owes in two years than what it owes in a decade or in this case, the government is less likely to pay in three years than it is in five."

Am I fundamentally misunderstanding this comment from the article, or is the author that clueless?

A higher yield indicates higher risk so in this context it would mean short term is more risky than long term debt.

However who knows what is going on in the mind of the collective market that is driving yield fluctuations.

Agreed that higher yield indicates higher risk, but the risk has absolutely nothing to do with the government not paying.
Title: Re: 10 year treasury - under 300bp
Post by: ILikeDividends on December 08, 2018, 07:35:27 PM
On the other hand, just saw this: https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html (https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html)

"An inverted yield curve is a sign investors think the government is less likely to pay back debt it owes in two years than what it owes in a decade or in this case, the government is less likely to pay in three years than it is in five."

Am I fundamentally misunderstanding this comment from the article, or is the author that clueless?
The fed is rolling billions off of it's balance sheet every month.  Even if they don't hike rates in the traditional sense, isn't QT kind of like hiking every month, in terms of liquidity?

I wonder if the long end would yield so little if they put a pause on the balance sheet roll off, or if they rolled off some of the longer dated assets, instead.  Wouldn't the yield curve tend to steepen simply as a result of doing either?

It seems the fed could influence the yield curve into whatever shape they want to.  Maybe they are?
Title: Re: 10 year treasury - under 300bp
Post by: Financial.Velociraptor on December 14, 2018, 05:12:06 PM
The 3/5 spread is upright again by 1 bp. 

https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
Title: Re: 10 year treasury - under 300bp
Post by: frugalecon on December 14, 2018, 05:29:39 PM
On the other hand, just saw this: https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html (https://finance.yahoo.com/news/treasury-yield-curve-just-inverted-sounding-alarm-recession-194921816.html)

"An inverted yield curve is a sign investors think the government is less likely to pay back debt it owes in two years than what it owes in a decade or in this case, the government is less likely to pay in three years than it is in five."

Am I fundamentally misunderstanding this comment from the article, or is the author that clueless?

Author is clearly a journalism major.  Editor clearly did an  undergrad in Management/Marketing.  That is an enormously stupid assessment.

Indeed. The inversion more likely reflects a belief that the Fed will need to cut short term rates in the not so distant future. The ten year yield just reflects expectations about short term yields at points in the future.