Bond Market

The bond market is the venue in which debt securities are traded prior to maturity. An investor in the bond market buys a debt instrument, which stems from what is essentially a loan to a corporation or government. In exchange for this money, the bond investor receives an interest rate. Debt instruments make interest payments at fixed intervals and for a fixed period of time; therefore, they are called fixed-income securities. The interest rate that the issuer pays is called a coupon. At maturity, the full amount of capital is returned to the investor. For investors in the bond market, two main criteria for buying a debt instrument is duration and credit quality. Duration for the bond market represents the length of the investment; credit quality refers to how strong the borrower is and how able they are to repay the full amount of debt.

Bond Market Semi-Crash: What It Means for Stocks

By Monday, May 18, 2015

Bond Market Semi-CrashOver the past few weeks, U.S. bond prices have declined (close to a semi-crash), and their yields have skyrocketed. Don’t think because you are not directly invested in bonds that what’s going on in the bond market will not affect you. The bond market is much larger than the stock market and a bond market crash can have a major impact. Read More

Massive Bond Market Sell-Off in Fragile Global Economy

By Friday, May 15, 2015

Pro_Con_May_15_2015_WEB_marvasti_1PM_imageOver the past six years, the Federal Reserve has been the major driver of the bonds market, snapping up $3.5 trillion in bonds. Thanks to the Federal Reserve and a number of other factors, investors are getting nervous and selling. In fact, they’re selling so much so that 10-year U.S. notes yields increased 40% since February.On May. Read More

About That 500% Jump in Interest Rates…

By Monday, September 22, 2014

Economy and Stock Market Handle a Five-Fold Jump in RatesThe verdict is in…Last week, at the end of its regularly scheduled meeting, the Federal Reserve said:1)      It would continue to reduce the amount of money it creates each month. The Fed said it will be out of the money printing business by the end of this year. By that time, the Federal Reserve will have created more than $4.0 trillion. Read More

If You Think Our Stock Market Is Overpriced, Wait Until You See This

By Friday, March 7, 2014

Why We Are Reaching a Stock Market TopThe stock market in France has been on a tear! Below, I present a chart of the French CAC 40 Index, the main stock market index in France.Looking at the chart, we see the French stock market is trading at a five-year high. With such a strong stock market, one would expect France, the second-largest economy in the eurozone, to be doing well.. Read More

Bond Market: Something Wicked Cometh This Way

By Tuesday, March 4, 2014

Bond Investors to Face Severe Losses in 2014The bond market is in trouble.As we all know, the Federal Reserve has been the biggest driver of bonds since the financial crisis. The central bank lowered its benchmark interest rate to near zero, then started quantitative easing, all of which resulted in the bond market soaring as yields collapsed to multi-decade lows.The chart below. Read More


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From: Michael Lombardi, MBA
Subject: Golden Opportunity for Stock Market Investors

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