Investment Director Tom Dyson warned of Inflation Volatility in July. Below, see what he means by the term and why investors can expect liquidity to flow out of tech and into energy and value stocks.
There are many different types of "bond yield" for any given bond. You can calculate its current yield (running yield), its nominal yield (coupon rate), its yield to maturity, its yield to call ,and other types of yield. Some yields are easy to figure out, others not so easy. When I buy a bond, the agent selling me the bond provides different yield info. to me so I can evaluate the bond, along with risk factors. Buying bonds intelligently, IMHO, is harder than buying stocks!
Perhaps I am not using terminology correctly. Every bond goes to market with a nominal coupon from which a beginning price is determined. That is tied into Fed rates etc. so at the issuing the bond has a certain yield. Thereafter, I understand that trading occurs during which price may fluctuate thereby altering yield.
I see what youโre saying. Youโre right, but your last sentence is what Iโm describing. The yield is of the price, which is moved by buyers & sellers.
If tech companies, especially advertising ones, arenโt growth companies anymore (which I do not believe to be true), shouldnโt one trade them counter cyclically, and... buy the dip ?
With these higher interest rates the banks will be making a killing. Might it be wise to add a few strong banks as investments? At the very least sell out of the money Puts in hopes the bank stocks will trend higher. Along with buying a lower priced Put to protect from the downside of the trade?
"For a highly leveraged economy, deflation would be catastrophic. If Iโm right about this โ and the economy is slipping into deflation โ the Fed will soon be coming to the rescue with a bail out."
"Soon" and "catastrophic" are hard to think with.
The rate hikes began, slowly, in Marchof this year, and got more serious as the year progressed. Too little, too late, but deflationary. Right?
Last year the FED instituted QT currency deflation by not rolling Tbills over, and also buying back, what, $100 billion per month - inherently deflationary. Right?
Now the markets are tanking. Home prices falling. Destructive for zombies, good for incumbents in November. Worrisome to stock-rich elites. Catastrophic for over-leveraged home owners perhaps. The FED is expected to make 75 point rate hikes twice more this year. "Then pivot," Dan asks.
"Hard questions, hard questions. No easy answers!" one of my professors used to say.
"The mills of the gods grind slowly, but they grind exceeding fine." the Greeks said.
Missing Bill's wisdom but enjoying these daily macro snapshots
Where is Tom and Bill at? The palace at Versailles?
Also, is there a mathematical relationship between bond yield and bond price or is it purely notional?
There are many different types of "bond yield" for any given bond. You can calculate its current yield (running yield), its nominal yield (coupon rate), its yield to maturity, its yield to call ,and other types of yield. Some yields are easy to figure out, others not so easy. When I buy a bond, the agent selling me the bond provides different yield info. to me so I can evaluate the bond, along with risk factors. Buying bonds intelligently, IMHO, is harder than buying stocks!
Interesting.
Bond price up yield down. The yield is based purely on the price of the bond.
I though it was the reverse. I thought the bond issuer set the yield, and the price was set ona secondary market.
No, thatโs not correct.
Perhaps I am not using terminology correctly. Every bond goes to market with a nominal coupon from which a beginning price is determined. That is tied into Fed rates etc. so at the issuing the bond has a certain yield. Thereafter, I understand that trading occurs during which price may fluctuate thereby altering yield.
I see what youโre saying. Youโre right, but your last sentence is what Iโm describing. The yield is of the price, which is moved by buyers & sellers.
If tech companies, especially advertising ones, arenโt growth companies anymore (which I do not believe to be true), shouldnโt one trade them counter cyclically, and... buy the dip ?
With these higher interest rates the banks will be making a killing. Might it be wise to add a few strong banks as investments? At the very least sell out of the money Puts in hopes the bank stocks will trend higher. Along with buying a lower priced Put to protect from the downside of the trade?
"For a highly leveraged economy, deflation would be catastrophic. If Iโm right about this โ and the economy is slipping into deflation โ the Fed will soon be coming to the rescue with a bail out."
"Soon" and "catastrophic" are hard to think with.
The rate hikes began, slowly, in Marchof this year, and got more serious as the year progressed. Too little, too late, but deflationary. Right?
Last year the FED instituted QT currency deflation by not rolling Tbills over, and also buying back, what, $100 billion per month - inherently deflationary. Right?
Now the markets are tanking. Home prices falling. Destructive for zombies, good for incumbents in November. Worrisome to stock-rich elites. Catastrophic for over-leveraged home owners perhaps. The FED is expected to make 75 point rate hikes twice more this year. "Then pivot," Dan asks.
"Hard questions, hard questions. No easy answers!" one of my professors used to say.
"The mills of the gods grind slowly, but they grind exceeding fine." the Greeks said.
you know, big tables and all.
looks like Putin
I have not seen anything re Bill. Where are his letters lately?