The U.S. Department of the Treasury issues debt obligations, including 10-year U.S. Treasury notes. The debt obligations range in length, from short-term to very long-term. Debt that has an obligation of less than one year is called a bill; debt obligations from one to 10 years are called notes; and debt obligations that are longer than 10 years are called bonds. The 10-year U.S. Treasury note is important as many other interest-bearing securities are priced based on this heavily traded security. Since many investors around the world watch the rates of the 10-year U.S. Treasury note for signs of economic strength or weakness, it is important for all investors to be aware of the interest rate environment.
The Bureau of Economic Analysis (BEA) surprised even the most optimistic of economists when it reported the U.S. economy grew at an annual rate of four percent in the second quarter of 2014.
On the surface, the number—four percent growth—sounds great. But how serious should we take that gross domestic product (GDP) figure?
Firstly, I’d like to start by pointing out that the BEA often revises its GDP numbers downward…. Read More
Yesterday, the Dow Jones Industrial Average fell 317 points, while the NASDAQ Composite Index fell 93 points—respective losses of about two percent per index. This morning, stock market futures are down again.
As a reader of Profit Confidential… Read More, this “rout” we are now in should come as no surprise. I have been writing for months how overpriced the stock market has become, how the stock market has become one big bubble thanks to the easy money policies of the Federal Reserve, and how the bubble would burst.
For a moment, consider yourself a loan officer at a major bank. Would you approve a loan for a customer who says they earn $1,000 a month, spend $1,300 a month, and don’t have a job? They also tell you they have unpaid debts of $17,000.
I don’t think anyone would authorize that kind of loan because the chances of getting the money back are next to zero…. Read More
In the first five weeks of this year, investors bought $22.0 billion worth of long-term stock mutual funds. (Source: Investment Company Institute, February 12, 2014.)
But as investors poured money into the stock market, hoping to ride the 2013 wave of higher stock prices, stocks did the opposite and went down. The Dow Jones Industrial Average is down three percent so far this year…. Read More
All of a sudden, auto sales are declining…
Auto sales in the U.S. economy declined to an annual rate of 15.4 million units in December. In November, this number stood at 16.41 million units—a decline of more than six percent. (Source: Motor Intelligence… Read More, January 3, 2014.) Analysts were caught off guard by the decline in December auto sales; they were expecting an increase!