The next couple of days in the stock market could be on the quiet side. You see, the Federal Reserve is holding a two day FOMC meeting on Tuesday, and Wednesday. Many institutional traders are going to be on hold until they hear what the Federal Reserve Chairman Ben Bernanke says. As you know, most institutional traders and investors are just dying to hear the words quantitative easing three (QE-3). The likelihood of this happening this time around is very slim.
This morning, the 10 and 30 year U.S. Treasuries are declining lower. The fall in the bond market comes as stocks soar higher and fear in the marketplace fades. Traders can easily watch a chart of the iShares Barclays 20+ Yr Treasury Bond (ETF) (NYSEARCA:TLT), and the iShares Barclays 7-10 Year Treasury Bond Fund (NYSEARCA:IEF) and see that both equities are coming under selling pressure.
Once again, bond yields on the 10 and 30 year U.S. Treasury Note are rising. Last week, the yields jumped sharply higher by more than 25 basis points on both the 10, and 30 year note. Higher rates will affect the important mortgage market and this could be problematic to the recent inflation rally.
What can the Federal Reserve Bank Chairman Ben Bernanke say this afternoon to help lift the stock markets? The major stock indexes are already trading higher in anticipation of some positive remarks by the central bank boss. The falling U.S. Dollar Index is helping the stock market today, however, the weaker dollar is not good for the people that are using dollars to purchase goods.
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Bonds and gold - using gold prices to predict bond prices
Is there a bond bubble today? Many well known investors and portfolio managers certainly seem to think so. In fact about a month ago Jeremy Siegel came out with an article in the Wall Street Journal proclaiming a huge bond bubble was about to burst, even comparing this to the technology equity bubble of the early 2000s.