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May 2012
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Archive for the Interest Rates Category

Italian Bonds Force Stock Futures Lower -

Stock futures are lower as traders focus on Italian bonds.  Bond yields for Italian debt have climbed and Berlusconi may step down as Prime Minister.   The 10 year Italian government bond yield rose to 6.58%.  The Dow Jones Industrial Average closed at almost 12,000 on Friday.

To read a related MarketWatch article, please click here:

http://www.marketwatch.com/story/us-stock-futures-sink-on-italy-worries-2011-11-07?dist=beforebell

Jim Sutliff

Economic News Sends Gold Higher -

Gold broke the $1,760 an ounce mark in trading this week.  The precious metal rose on the possibility of slower domestic economic growth and another round of monetary stimulus.  Recently, Federal Reserve Chairman Ben Bernanke indicated that additional monetary stimulus may be in the works to lower unemployment.  The lingering European debt crisis is also increasing demand for gold.

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-11-04/gold-traders-more-bullish-as-debt-crisis-u-s-economy-spur-bets-on-gains.html

James Sutliff

Greek Referendum Sends Stocks Lower -

The Dow Jones started to rebound after falling more than 300 points.  Stocks fell after Greek Prime Minister George Papandreou called for a referendum on the European Union bailout plan.  Currently, the Dow Jones is down slighlty less than 200 points in afternoon trading.

To read a related Reuters article, please click here:

http://www.reuters.com/article/2011/11/01/us-markets-stocks-idUSTRE7A01NM20111101

Jim Sutliff

IMF Plan Opposed -

The United States opposed a plan to almost double the size of the International Monetary Fund.  Currently, the fund has $380 billion in resources.  Shareholders opposed to the plan included Japan, China, Germany, Canada, and Australia.

To read a related Reuters article, please click here:

http://www.reuters.com/article/2011/10/14/us-g-idUSTRE79C74G20111014

Jim Sutliff

Treasuries Fall On Jobs Data -

Treasury yields rose for the fourth straight day after a government jobs report indicated that the economy added more jobs in September.  Ten year notes increased to 2.06% near the end of the trading day.  Yields had fallen to their lowest mark on September 23rd at slightly above 1.67%. 

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-10-07/treasuries-fall-as-u-s-economy-added-more-jobs-last-month-than-forecast.html

Jim Sutliff

Federal Reserve Set To Purchase Debt -

The Federal Reserve announced that it would sell $400 billion of short term debt and purchase longer term bonds with the funds.  In addition, the Federal Reserve stated that there were significant downside risks to the economic outlook.  The warning sent stocks lower with the S & P 500 closing down 3% for the trading day.

To read a related Reuters article, please click here:

http://www.reuters.com/article/2011/09/21/us-usa-fed-idUSTRE78J3HB20110921

James Sutliff

Dow Finishes Up -

The Dow Jones finished up 125 points on Friday but was still down 1.5% for the week.  Trading was very volatile all week with the Dow Jones moving 400 or more points on four consecutive days.  Gold touched $1,800 an ounce and crude oil bounced back from hitting almost $80 a barrel. 

To read a related Associated Press article, please click here:

http://finance.yahoo.com/news/Dow-finishes-wild-week-on-an-apf-2740719647.html?x=0&sec=topStories&pos=main&asset=&ccode=

Jim Sutliff

Stocks & Oil Tumble -

The Dow Jones Industrial Average fell over 600 points in trading on Monday.  The downgrade of U.S. debt and concerns for the global economy continued to drive the market lower throughout the day.  Crude oil also fell in trading and finished the day near $80 a barrel.  Gold finished higher on the day and increased to over $1,700 an ounce. 

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-08-07/u-s-stock-futures-fall-amid-concern-s-p-cut-may-worsen-economic-slowdown.html

James Sutliff

U.S. Debt Downgraded -

Standard and Poor’s lowered the U.S. credit rating to AA+ and also attached a negative outlook.  The U.S. has held a triple A credit rating for 70 years and the downgrade is likely to have a negative effect on the financial markets.  Moody’s and Fitch ratings still have U.S. debt at the highest credit rating.  

To read a related Wall Street Journal article, please click here:

http://online.wsj.com/article/SB10001424053111903366504576491421339802788.html?mod=WSJ_hp_LEFTTopStories

Jim Sutliff

Dollar Hits Record Lows -

 The U.S. Dollar continued to decline against all major currencies and hit record lows in trading.  The uncertainty surrounding debt negotiations between Republicans and Democrats are leading traders to sell the Dollar.  In afternoon trading the U.S. Dollar/ Euro exchange went above $1.45.  In addition, the stock market lost some ground.

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-07-26/asia-stocks-gain-u-s-futures-oil-fall-before-obama-speech-on-debt-limit.html

James Sutliff

Stocks Rise On Possible Stimulus -

Stocks rebounded after minutes from the Federal Reserve meeting indicated that a possible stimulus could be on the way.  The two day drop was the worst for the Dow Jones  since March.  European stocks declined for a third straight day due to continued debt concerns.

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-07-12/u-s-stock-index-futures-slump-on-italy-debt-crisis-concern-alcoa-plunges.html

Jim Sutliff

Municipal Bond Tax Exempt Proposals -

Municipal bonds are facing proposals that would eliminate their tax exempt status.  Republican Paul Ryan submitted a budget proposal that was aimed at lowering the deficit but also would end municpal bond tax exemption.  It is not likely that municipal bonds will lose their tax exempt status because of the effect it would have on the issuers. 

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-06-02/municipal-bonds-likely-to-remain-tax-exempt-bny-mellon-says.html

Jim Sutliff

Municipal Bonds Rebound -

Municpal bonds have rebounded over the last month with yields for AAA rated munis falling for 25 consecutive trading days.  Investors are willing to accept slightly more risk to achieve greater returns than from safe U.S. Treasuries.  The tax free component of municipal bonds is another factor for investors. 

To read a related CNN Money article, please click here:

http://money.cnn.com/2011/05/17/markets/munis/index.htm?iid=HP_LN

James Sutliff

Treasuries Fall -

Treasuries ended a five week winning streak and fell on economic data and a rise in commodities.  Yields remained low this week with the sale of $72 billion in notes and bonds.  Also, inflation concerns are easing and investors are seeking higher returns than provided by safe U.S. Treasuries.

To read a related Bloomberg article, please click here:

http://www.bloomberg.com/news/2011-05-14/treasuries-drop-amid-mixed-economic-data-72-billion-note-and-bond-sales.html

Jim Sutliff

Investors Crave Corporate Bonds -

Low interest rates are increasing investor demand for corporate bonds.  High-yield and investment grade corporate bond issuance both showed a significant increase in the first quarter of 2011.  High-yield bond issuance jumped 36% internationally and 29% domestically.  Investment grade figures were 14% and 19% for the quarter.  Standard & Poor’s indicated that expected default rates will fall to 1.6%. 

To read a related Smart Money article, please click here:

http://www.smartmoney.com/investing/bonds/new-corporate-bonds-feed-investor-frenzy-1303423914177/

Jim Sutliff