With the Dow plunging near the 24,000 level as gold surges back above $1,330, this has a lot of people very worried.
This Has A Lot Of People Very Worried
April 24 (King World News) – Here is a portion of today’s note from Peter Boockvar: With the 10 yr US Treasury yield, 3% is not just a round number. As seen in the chart, we peaked at 3.03% on December 31st, 2013 soon after touching exactly 3.0% in September 2013 (see below).
10-Year Yield Threatening Breakout!
Exceeding 3.03% would put us at the highest level since July 2011. I believe it’s just a timing issue and the trend of rates, across the curve, is up…
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And this from legend Art Cashin…
A Note From A Friend – With the yield on the ten year Treasury note pressing hard against the 3% level, my good friend, Barry Habib, the mortgage maven, dropped me this email:
Here is an update on the 10-year. Yields should finally hit the target of 3.04% very soon. The move was delayed by the decline in stocks, which temporarily saw funds park Money from stocks to bonds. But with global yields rising, stocks stabilizing, and the Fed cutting purchases of MBS and Treasuries again last week, yields are moving higher.
Circle May 1st on your calendar, as that is the release for March PCE. This important inflation read should come in hotter than people expect. And should push headline PCE above 2% on a yoy basis. The core will likely come in at 1.9% yoy. The reason for the jump is because the most recent 12 months will include March of 2018, and drop March of 2017. The read from the month of March 2017 was actually negative 0.2 headline and 0.1 core. If replaced with a more normal positive 0.2 on each, the yoy inflation reading should be worry some for bonds.
The target of 3.04%, once hit should hold for the first time tested. But it’s only a matter of time until this level is broken to the upside.
No mincing of words, just the layout as he sees it.
Overnight And Overseas – In Asia, equity markets rose across the board. There were sharp rallies in Shanghai and Hong Kong with more moderate up moves in Japan and India.
European equity markets are mixed and uncertain in light trading.
Among other assets, Bitcoin has risen smartly. Gold is up a bit but remains mired in its multi-week resistance band. Crude is fractionally higher with WTI trading just above $69. The euro is flat against the dollar and yields are a few ticks lower.
Consensus – Earnings season is now in full swing, with many of those reporting beating on both the top and bottom lines. Yet for all the pleasant surprises in earnings, the averages are basically where they were when earnings season began. That suggests other influence on prices.
Stick with the drill – stay wary, alert and very, very nimble.
For Those Watching Gold
King World News note: Up to this point the price of gold has been capped on rallies and has remained trapped in a tight range. This trading range will not last much longer. For everyone worried about the commercial short positions, keep in mind that the crude oil market skyrocketed with record commercial short positions. It will be interesting to see which way the gold market breaks in the coming days and weeks.
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