14 matching records.
The speaker suggests that buying 20-year zeros at 5.3% is not advisable, as they believe rates are likely to rise, leading to lower bond prices. They also mention that bonds have underperformed other assets in the long term.
The speaker believes it is not possible for the Fed to stand pat in such a scenario. They argue that the Fed would have to align with market movements to avoid large arbitrage opportunities. The speaker also suggests that the best way to play for a bounce and lower 10-year rates is to sell puts in ZN.
Bonds and interest rates move inversely. However, there is uncertainty about the current correlation, with some suggesting that both are doing a little bit of this. The speaker believes that bonds are going to break, and markets are going to break as well, with interest rates going up.
The speaker suggests that the odds of the Fed raising rates are increasing, especially if the conflict continues. They note that raising rates in this environment would likely be detrimental to both the stock and bond markets.
The speaker mentions that the ZB (likely the 10-year Treasury bond) traded in the 107 handle, which is a reference to the price level. They suggest that this is a guaranteed rate hike, indicating that the elevated yields are a sign of anticipated interest rate increases.
The market stalled at 7,000 due to either an FOMC meeting or concerns about the Apple Card, with Powell indicating that two rate cuts for this year are not a foregone conclusion. This uncertainty caused the market to stall.
The AI can provide insights on potential Fed rate cuts, but the exact number is not specified in the transcript. The AI's capability is to search for information and provide answers based on available data.
The 30-year bond is in a range of 4.7 to 5.25.
Commercial real estate faces headwinds due to reduced space demand and structural issues, while residential real estate is a sellers' market with limited supply. The speaker is not bullish on real estate currently.
The speaker believes that CDs offer better returns than money funds and that the interest rates for CDs are more favorable than those for S&P box spreads. They also mention that the rates for S&P box spreads are typically 25 to 50 basis points above risk-free rates, and that the market is tight with limited opportunities for high returns.
The market is soft, with the S&P down 78, NASDAQ down $440, gold down $106, oil up $4.73, and the 10-year yield at 4.7.
The speaker suggests a 30-30-40 allocation, with 30% in trading, 30% in long-term assets, and 40% in cash and treasury equivalents. This allocation is influenced by the current state of interest rates, with higher rates leading to a greater emphasis on cash. The speaker also advocates for selective market timing and the use of capital-efficient instruments like options, futures, and futures options, while adjusting notional sizes based on buying power and risk management.
The speaker suggests that box spreads are an intelligent trade, collecting a couple of points, but questions the return on SPX boxes, noting that the return is 36, which is lower than the 475 on a CD. The speaker also implies that the trade was likely made two months ago.
Earning interest on idle cash without reducing options buying power is possible if the firm pays interest on the cash. Alternatively, traders can invest in products like T-bills, but they must avoid using the cash for margin or leveraged positions. It's important to note that using idle cash for options or stocks could involve borrowing from the firm, which may come with higher interest rates.