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Prices Down, Interest Rates Up

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Yesterday the price for the 10-year Treasury note ticked down 15/32 to yield 2.212% while the 30-year fell 25/32 to yield 3.367%. Investors reaching out on the yield curve should not be surprised by this downward price action. The Treasury market paid no attention to Standard & Poor’s upward revision, to stable, for the U.S. credit rating. I’d stay away from Treasuries altogether. As Carolyn Cui at The Wall Street Journal reports:

Treasuries held losses despite Standard & Poor’s move to raise its outlook on the U.S. credit rating, as the market continued to grapple with fears that the Federal Reserve will start tapering its stimulus this year.

Credit-rating firm S&P revised its outlook for the U.S.’s rating to stable from negative, citing its resilient economy, monetary credibility and the dollar’s status as the world’s reserve currency. But the firm kept the U.S.’s sovereign credit ratings at “AA+/A-1+.”

The positive news failed to draw cheers from the Treasury TWE.AU -2.50%market, however.

At 3 p.m. EDT, the benchmark 10-year Treasury note was down 15/32 in prices to yield 2.212%. The 30-year-bond fell 25/32 to yield 3.367%. Bond prices move inversely to yields.

Monday’s losses extended the selloff in the Treasury market following Friday’s jobs report, which showed a slightly better number of jobs created in May.

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.