A bond trader has just placed a record-breaking single bet by going long on December 2024 short-term interest rate futures. This strategy will pay off if the Federal Reserve cuts interest rates at least three times by the end of the year, a scenario that is not yet fully priced into the market following recent robust economic data and higher-than-expected inflation figures. The Secured Overnight Financing Rate (SOFR) futures — the tool used to assess market wagers on Fed interest rates — suggest that traders are anticipating a total of 68 basis points in rate cuts by the end of the year. What Happened: A significant transaction involving 75,000 December 2024 SOFR futures contracts

As financial institutions continue to raise their certificate of deposit (CD) rates, American savers find themselves presented with increasingly attractive opportunities to grow their money. These developments have been spurred by multiple Federal Reserve rate increases since March 2022, which have had a cascading effect on interest rates across the financial sector. According to Bankrate’s data, the average 1-year annual percentage yield (APY) on CDs offered by their institution partners has reached an impressive 5.27%. This figure is particularly noteworthy because it surpasses the yield on 2-year Treasury bonds by more than half a percentage point. This indicates that consumers

October jobs report numbers missed expectations Friday, and came in at nearly half of September's reported figures. Non-farm payrolls increased by 150,000 jobs in October, registering a steep decline from September's 297,000 jobs. The figure fell short of market forecasts, which stood at 180,000. One key reason for the deceleration is likely the United Auto Workers strikes, which resulted in a net loss of jobs for the manufacturing sector. Market Reaction To The US Jobs Report Treasury yields tumbled across the board. The yield on the two-year Treasury fell to 4.87%, a decrease of more than 10 basis points, while the 10-year Treasury yields fell by 11 basis points to 4.56%. The ben

Treasury yields continue to surge, defying expectations and causing further strain in the U.S. core bond market. On Tuesday, yields on the 2-year Treasury note reached 5.2%, marking its highest level in over 17 years. The last time short-term Treasury security yields were this elevated was back in June 2006 when the federal funds rate was holding steady at around 5% to 5.25%. This upward movement in yields followed the unexpectedly robust retail sales figures in September, published earlier today, which underscored the continued strength of consumer demand in the country. This, in turn, dispelled any concerns within the Federal Reserve about an economic slowdown. Additionally, infla

My firm, LCM Capital Management, has always been a big proponent of buying, whenever possible for our clients, individual fixed income securities such as municipal bonds, CD’s, Treasuries etc. Owning and managing an investment advisory firm, as my partner and I have for the last 23 years, we are constantly inundated by mutual fund companies or Exchanged Traded Fund (ETF) providers explaining the “benefits” to us, for our clients, in using their products. In their defense, it’s their job and if I was in their shoes, I would do the same thing since firms such as ours have already done the heavy lifting part which is finding and retaining clients. But I’m not one of them and I believe our clien

On CNBC’s "Halftime Report Final Trades," Liz Young of BNY Mellon Investment Management named Utilities Select Sector SPDR Fund (NYSE:XLU) as her final trade. Stephanie Link of Hightower said International Business Machines Corporation (NYSE:IBM) has a good yield. The company’s stock is up just 2% year-to-date, but is up 25% from its recent lows. "I like the software and consulting mix, which is 75% of the total revenue," she added. RBC Capital analyst Amit Daryanani initiated coverage on IBM with an Outperform rating and announced a price target of $188. The Armonk, New York-based company recently reported second-quarter earnings of $2.18 per share, ahead of the $2.01 Street estimat

With the Fed funds rate at 5.5%, its highest level since the early 2000s, the temptation of cash-like investments has never been more appealing, pushing investors to reconsider riskier assets such as stocks. While the Fed may opt to press the hold button this month, the end of rate hikes has not been yet declared. Indeed, the possibility that interest rates could remain high for far longer than many predicted only a few months ago appears to be becoming more realistic. The resilience of the U.S. economy in recent times has left many economists and analysts scratching their heads, prompting them to adjust their growth projections. This, in turn, has made the prospect of a looming re

The U.S. economy has emerged as the year’s unexpected star performer, with Federal Reserve officials poised to double their 2023 growth projections due to a series of positive indicators. From consumer spending to residential investment, data has consistently outperformed expectations, prompting economists to revise their forecasts. The unofficial estimate from the Atlanta Fed even suggests a remarkable 5.6% annualized expansion in Q3. This dramatic turnaround from just three months ago, when recession fears loomed, could force the Fed to rethink its 2024 interest-rate cut projections, according to Bloomberg. Chart: Atlanta Fed GDP Nowcast Is Expected To Hit 5.6% in Q3 2023

Financial safeguard tools are on sale these days and protecting your portfolio against sudden stock market declines, or simply speculating on them, has never been as cheap as it is now. This insight comes from the Global Equity Derivatives Research team at Bank of America, which recently published a note analyzing the cheapness of market hedging costs. “Since our data began in 2008, it has never cost less to protect against an S&P drawdown in the next 12 months, as high rates align with low implied vol and correlation to offer a historic entry point for hedges,” analysts at Bank of America stated. Traditionally, there are several ways to hedge against market downturns, including i

Traders appear to be backing out on the idea that the Federal Reserve will trim rates this year, as is apparent from the U.S. short-term interest-rates market, a report stated. Options open interest, which shows the amount of risk held by traders, declined sharply across a number of strikes shown by preliminary CME data released Monday, reported Bloomberg. This is a sign of capitulation following heavy pull-backs from rate-cut bets taken earlier, it said. Also Read: How To Invest In Startups The fears seem to be justified given the fact that Fed Chair Jerome Powell indicated the central bank could hike rates by another 50 basis points this year. He also reiterated the central bank's