iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT)

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iShares 20+ Year Treasury Bond ETF

The fund generally invests at least 90% of its assets in the bonds of the underlying index and at least 95% of its assets in U.S. government bonds. The underlying index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity greater than or equal to twenty years.

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Vice President-elect James David Vance is a venture capitalist with investment experience in technology and connections to several notable industry mavens.
What Happened: According to his pre-election financial disclosures dated Aug. 13, 2024, Vance&#8217;s top holdings include investments in ETFs and Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) apart from his position as a general or a limited partner in a few private equity and venture capital funds.
<a href="https://efdsearch.senate.gov/search/home/">United States Senate Financial Disclosures</a>&#8216; official website, details Vance&#8217;s holdings across the board. The most notable investments with the highest deployment of funds include top ETFs.
Invesco QQQ Trust, Series 1 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NYSE">QQQ</a>) is Vance&#8217;s topmost investment with an invested value between $1 million and $5 million. This is followed by $500,000 to $1 million investments in SPDR Dow Jones Industrial Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) and SPDR S&amp;P 50 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>). Vance has also invested about $100,000 to $250,000 in the iShares 20+ Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NYSE">TLT</a>), and SPDR Gold Trust ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).
Apart from these, Vance has also invested about $100,001 to $250,000 in Bitcoin. He is also associated as a limited partner and general partner with Narya Capital Fund I, L.P, Rise of the Rest Seed Fund, LP and Rise of the Rest Seed Fund AIV GP, LLC.
Also read: <a href="https://www.benzinga.com/markets/cryptocurrency/24/07/39799850/5-things-you-might-not-know-about-j-d-vance-hillbilly-elegy-author-bitcoin-holder-first-mi">5 Things You Might Not Know About J.D. Vance: &#8216;Hillbilly Elegy&#8217; Author, Bitcoin Holder, First Millennial VP Pick And More</a>
Why It Matters: Vance is set to become the <a href="https://www.benzinga.com/markets/cryptocurrency/24/07/39799850/5-things-you-might-not-know-about-j-d-vance-hillbilly-elegy-author-bitcoin-holder-first-mi">first millennial VP</a> for a major party in a presidential race. Before his career in politics, Vance was a former principal at Peter Thiel&#8217;s Mithril Capital in 2016 and 2017. He later left Mithril to work at Revolution LLC in 2017, an investment firm founded by AOL founder Steve Case. In 2019, Vance co-founded Narya Capital, a venture capital fund.
Trump&#8217;s critic turned running mate, Vance had publicly called the President-elect &#8220;reprehensible&#8221; and said that he is worried about his political ideology, <a href="https://www.washingtonpost.com/elections/2024/07/15/jd-vance-trump-criticism/">reported</a> the Washington Post.
The senator brushed off the past criticism of Trump in <a href="https://www.foxnews.com/media/jd-vance-addresses-past-criticism-trump-after-hes-chosen-vp-bought-medias-lies-distortions">his interviews</a> before the election. &#8220;I was certainly skeptical of Donald Trump in 2016, but President Trump was a great president, and he changed my mind,&#8221; Vance said. The Vice President-elect said he &#8220;bought into the media&#8217;s lies and distortions.&#8221;
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JD Vance's Investment Playbook Has Bitcoin And ETFs: Here's What Else The VP-Elect Is Betting On

The U.S. stock market traded mixed on Tuesday morning, with major indices showing tight movements as investors awaited the release of the Federal Reserve's <a href="https://www.benzinga.com/topic/interest-rates">November meeting minutes</a>. 
Reports are expected to provide fresh critical insights into the central bank's outlook for interest rates. Fed futures currently assign a 59% probability of a 25-basis-point rate cut in December. The remaining odds suggest the Fed may hold rates steady in the 4.5%-4.75% range, as per CME FedWatch.
Fed futures are currently assigning a 59% chance to a 25-basis-point Fed rate cut in December, while remaining odds point to the option of holding rates steady at 4.5%-4.75%, as per CME FedWatch. 
<h3 class="wp-block-heading">25% Tariffs On All Imports</h3>
In a relatively quiet trading session, both Mexican and Canadian assets saw a surge in volatility after President-elect Donald Trump pledged to <a href="https://www.benzinga.com/etfs/currency-etfs/24/11/42190765/trumps-tariff-threats-slam-mexican-peso-canadian-dollar-only-the-beginning-of-a-sorely-needed-repricing-expert-warns">raise tariffs to 25% on all imports from Mexico and Canada</a>, citing efforts to combat drug trafficking and illegal immigration.
The Mexican peso dropped 2.5%, falling to 22.80 per U.S. dollar, a level of weakness not seen since August 2022. The iShares MSCI Mexico ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWW#NYSE">EWW</a>) also declined sharply, tumbling 2.9%.
President Claudia Sheinbaum responded with a retaliatory warning, suggesting Mexico could impose its own tariffs, escalating the risk of economic damage for both nations.
The Canadian dollar fared slightly better, sliding 0.7% but still reaching its lowest level in more than four years.
U.S. Treasury yields ticked higher, reversing some of the sharp declines seen on Monday following President-elect Trump's announcement of Scott Bessent as his pick for Treasury Secretary. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) fell 0.5%, cooling off after Monday's 2.6% rally.
Gold traded flat, remaining near $2,010 per ounce. Oil prices fell 0.8% to $68.30 per barrel, as markets monitored developments around the ceasefire deal between Israel and Hezbollah as the Israeli Security Cabinet meets for the official approval.
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) rose slightly by 0.7%, after logging its worst single-day performance in more than four months on Monday. 
<h3 class="wp-block-heading">Tuesday&#8217;s Performance In Major US Indices, ETFs</h3>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>% (1-day)</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>6,013.26</td>
<td>0.4%</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>20,891.08</td>
<td>0.4%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>44,656.98</td>
<td>-0.2%</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,426.91</td>
<td>-0.6%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12:52 p.m. ET</figcaption></figure>
According to&nbsp;<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent112524&amp;t=be2bearmibe3na1">Benzinga Pro</a>&nbsp;data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) edged 0.4% higher to $596.83, eyeing the seventh straight session of gains.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;inched 0.1% lower to $447.10.</li>
<li>The tech-heavy&nbsp;Invesco QQQ Trust Series&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) rose 0.5% up to $508.98.</li>
<li>The&nbsp;iShares Russell 2000 ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) fell 0.4% to $241.28.</li>
<li>The&nbsp;Utilities Sector Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>) outperformed, rising 1%. The&nbsp;Materials Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLB#NYSE">XLB</a>) lagged, down 0.9%.</li>
</ul>
<h3 class="wp-block-heading">Tuesday&#8217;s Stock Movers</h3>
<ul>
<li>Shares of automakers fell after President-elect Donald Trump threatened tariffs on goods <a href="https://www.benzinga.com/news/global/24/11/42196251/general-motors-stellantis-lead-automaker-stock-declines-as-trump-proposes-aggressive-tariffs-on-mexico-canada">imported from Canada and Mexico.</a> Ford Motor Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/F#NYSE">F</a>), General Motors Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GM#NYSE">GM</a>) and Stellantis N.V. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STLA#NYSE">STLA</a>) were down 2.3%, 8.4% and 5.3%, respectively. For GM this may potentially mark the worst day since August 2021. </li>
<li>Eli Lilly &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LLY#NYSE">LLY</a>) rose 5.4% while Amgen Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMGN#NASDAQ">AMGN</a>) tumbled over 8%, after the latter saw weight-loss drug results coming in below analyst expectations. </li>
<li>Zoom Video Communications Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ZM#NASDAQ">ZM</a>) fell over 7% in reaction to quarterly earnings. </li>
<li>Other stocks reacting to quarterly results included Semtech Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SMTC#NASDAQ">SMTC</a>), up 18%, Analog Devices Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ADI#NASDAQ">ADI</a>), down 3%, Agilent Technologies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/A#NYSE">A</a>), down 1.8%, Woodward Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/WWD#NASDAQ">WWD</a>), up 6%, Best Buy Co. Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BBY#NYSE">BBY</a>), down 7%, Dicks Sporting Goods Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DKS#NYSE">DKS</a>), down 0.2%, VinFast Auto Ltd. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VFS#NASDAQ">VFS</a>), up 1%. </li>
</ul>
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Stocks Mixed Ahead Of Fed Minutes, Mexican Peso Tumbles To Over 2-Year Lows On Tariff Fears: What's Driving Markets Tuesday?

Wall Street managed to recover from a red start caused by heightened geopolitical tensions stemming from the <a href="https://www.benzinga.com/topic/russia">ongoing Russia-Ukraine conflict.</a>
Ukraine launched its first U.S.-made missile strike on a Russian city, while Russian President Vladimir Putin adjusted the nation's nuclear doctrine to broaden scenarios for a potential response. Yet, Russian Foreign Minister Sergei Lavrov sought to assuage fears of a nuclear escalation, stating that a nuclear war is not something Russia is considering.
Amid the geopolitical noise, investors remained focused on corporate earnings. Walmart Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WMT#NYSE">WMT</a>), often regarded as a bellwether of consumer health, surpassed expectations for the recent quarter. The retailer&#8217;s stock surged 4%, hitting fresh all-time highs and boosting market sentiment.
At midday, both the S&amp;P 500 and Nasdaq 100 posted marginal gains, while blue-chip stocks showed a slight deceleration and small caps held steady.
In fixed income, longer-dated bond yields dipped, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) climbing 0.5%. The U.S. dollar gained 0.1%, attempting to rebound after two consecutive sessions of losses.
Geopolitical risks lifted demand for commodities, with gold and oil rebounding 0.8% and 0.5%, respectively. Natural gas prices – as closely tracked by the United States Natural Gas Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UNG#NYSE">UNG</a>) – extended the rally, adding 2.6% after a 5.3% jump on Monday and hitting the highest levels since June. 
Meanwhile, Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) continued to display extraordinary strength, with the cryptocurrency breaking to a new all-time high of $93,931, underscoring robust market interest despite broader macro uncertainties.
<h2 class="wp-block-heading">Tuesday&#8217;s Performance In Major US Indices, ETFs</h2>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day %chg</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>20,610.47</td>
<td>0.3%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,907.68</td>
<td>0.2%</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,309.75</td>
<td>0.1%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>43,316.79</td>
<td>-0.2%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 13:10 p.m. ET</figcaption></figure>
According to&nbsp;<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent111924&amp;t=be2bearmibe3na1">Benzinga Pro</a>&nbsp;data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) rose 0.2% to $589.41.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;fell 0.3% to $433.10.</li>
<li>The tech-heavy&nbsp;Invesco QQQ Trust Series&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) edged 0.4% higher to $502.08.</li>
<li>The&nbsp;iShares Russell 2000 ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) fell 0.3% to $229.50.</li>
<li>The&nbsp;Technology Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>) outperformed, rising 0.5%. The&nbsp;Energy Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) lagged, down 0.7%.</li>
</ul>
<h2 class="wp-block-heading">Tuesday&#8217;s Stock Movers</h2>
<ul>
<li>Super Micro Computer Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SMCI#NASDAQ">SMCI</a>) surged 22% after appointing BDO US as its auditor and submitting a compliance plan to Nasdaq, signaling a proactive effort to address delisting concerns. The news bolstered investor confidence in the company&#8217;s governance and market stability.</li>
<li>United Airlines Holdings Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/UAL#NASDAQ">UAL</a>) climbed 3.5%, reaching its highest level since December 2019, following a bullish call from TD Owen, which raised the stock's price target from $100 to $110.</li>
<li>Incyte Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/INCY#NYSE">INCY</a>) plummeted over 14% after announcing that data from its Phase 2 clinical study failed to support further development, disappointing investors hoping for progress in its pipeline.</li>
<li>Valvoline Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VVV#NYSE">VVV</a>) dropped 8% in reaction to a weaker-than-expected earnings report, as the market digested concerns over the company&#8217;s growth trajectory and profitability.</li>
<li>Vertive Holdings Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VRT#NYSE">VRT</a>) rallied 11.7% in reaction to price target raises from investment banks such as Deustsce Bank and Oppenheimer.</li>
</ul>
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Stocks Move Higher, Walmart Hits Record High, Natural Gas Reaches 5-Month Peak: What's Driving Markets Tuesday?

European markets sank on Tuesday and U.S. stock futures followed suit, weighed down by escalating geopolitical tensions after Russian President Vladimir Putin revised the country&#8217;s nuclear doctrine to broaden the conditions <a href="https://www.benzinga.com/topic/vladimir-putin">for deploying atomic weapons. </a>
Putin's move to ease the threshold for nuclear strikes came just a day after the White House authorized Ukraine to deploy American-made long-range ATACMS missiles deep into Russian territory. 
The Euro STOXX 50, as tracked by the SPDR DJ Euro STOXX 50 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FEZ#NYSE">FEZ</a>), and STOXX 600 indices dropped 1.2% and 0.8%, respectively, both tracking toward their lowest closing levels since mid-August.
<h3 class="wp-block-heading">Putin Expands Nuclear Doctrine Amid US-Backed Ukrainian Strike</h3>
On Tuesday, Ukraine reportedly carried out its first ATACMS strike on a military facility near Karachev in Russia&#8217;s Bryansk region, about 70 miles from Ukraine, according to reports by <a href="https://newsukraine.rbc.ua/news/us-officially-allows-ukraine-to-to-strike-1732012491.html">RBC Ukraine</a>.
RBC Ukraine cited a Defense Forces source confirming a successful strike, marking the first time these long-range missiles were used in such a capacity. Russia acknowledged the attack.
&#8220;Indeed, for the first time, we used ATACMS to strike Russian territory. The strike was carried out against a facility in the Bryansk region, and it was successfully hit,&#8221; the source reported.
On Monday, the previous day, U.S. Under Secretary of State for Western Hemisphere Affairs Brian A. Nichols officially confirmed that the White House had given Ukraine approval to use long-range weapons to target Russian territory.
<h3 class="wp-block-heading">European Markets React: Euro, Bank Equities Drop</h3>
The geopolitical developments triggered a sharp selloff across European equities. In Poland, the WIG20 stock index plunged 2.5%, reflecting the country's proximity to the conflict and heightened exposure to regional risks. 
European banks also bore the brunt of the downturn, with the banking index slipping 2.2%. Among the hardest-hit financial institutions were CaixaBank SA (OTCPK: CAIXY), which sank 5.1%, FinecoBank Spa (OTCPK: FCBBF), down 4.2%, and Unicredito Spa (OTCPK: UNCFF), which dropped 3.3%.
The euro also came under pressure, falling 0.3% to hover at $1.0550 against the U.S. dollar, as traders sought safety in the greenback amid mounting geopolitical risks.
<h3 class="wp-block-heading">Flight To Safety: Bonds, Gold Shine</h3>
Heightened geopolitical risks spurred demand for safe-haven assets. Yields on long-dated U.S. Treasuries fell by 4-5 basis points, lifting bond prices. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) could see strong gains following this move.
Gold surged 1%, building on a 1.9% rally from the previous session, as investors sought shelter from rising uncertainties.
<h3 class="wp-block-heading">US Premarket Action</h3>
U.S. equity futures mirrored the cautious sentiment overseas, with Dow Jones Industrial Average futures down 0.4%, S&amp;P 500 futures declining 0.3%, and Nasdaq 100 futures slipping 0.1%. 
Walmart Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WMT#NYSE">WMT</a>) surged over 3% in premarket trading after reporting stronger-than-expected quarterly earnings. 
Among defense stocks, Lockheed Martin Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>) gained 0.9%, while Boeing Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) fell by the same margin.
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Putin Revises Nuclear Doctrine For Broader Strikes After US-Backed Ukrainian Attack: Markets Drop, Bonds Gain

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Signs of a waning Trump-led rally emerged Thursday as investors assessed the economic outlook and awaited potential signals on the interest-rate path from the upcoming Fed Chair Jerome Powell&#8216;s speech in <a href="https://www.benzinga.com/topic/jerome-powell">Dallas at 3 p.m. ET. </a>
Inflation data from the past two days provided mixed signals: consumer prices met expectations, while producer prices slightly exceeded forecasts, with both indicators showing a year-over-year uptick in October.
Despite this inflation data, markets remain confident the Fed will continue easing, pricing in an 80% likelihood of a December rate cut.
Wall Street&#8217;s major indices were in the red by midday, with the S&amp;P 500 down 0.3% and small-cap stocks lagging behind large-caps.
The U.S. dollar index ticked up 0.1%, even as Treasury yields declined. Bonds outperformed equities, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) climbing 1.2%.
Gold edged 0.2% lower, while oil rose 0.2%. Meanwhile, Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) saw its rally stall, dropping 1.8%.
<h3 class="wp-block-heading">Thursday&#8217;s Performance In Major US Indices, ETFs</h3>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>Chg % (1 day)</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>43,884.60</td>
<td>-0.2%</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>20,986.66</td>
<td>-0.2%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,969.78</td>
<td>-0.3%</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,345.60</td>
<td>-1.0%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12:55 p.m. ET </figcaption></figure>
According to&nbsp;<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent111424&amp;t=be2bearmibe3na1">Benzinga Pro</a>&nbsp;data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) fell 0.3% to $595.18.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;eased 0.2% to $438.76.</li>
<li>The tech-heavy&nbsp;Invesco QQQ Trust Series&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) slipped 0.4% to $510.28.</li>
<li>The&nbsp;iShares Russell 2000 ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) tumbled 1% to $232.71.</li>
<li>The&nbsp;Consumer Staples Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>) outperformed, rising 0.2%. The&nbsp;Industrials Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLI#NYSE">XLI</a>) lagged, down 1.5%.</li>
</ul>
<h3 class="wp-block-heading">Thursday&#8217;s Stock Movers</h3>
<ul>
<li>Walt Disney Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIS#NYSE">DIS</a>) rose 7% after reporting better-than-expected quarterly results. </li>
</ul>
Other stocks reacting to earnings reports included: 
<ul>
<li>Cisco Systems Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CSCO#NASDAQ">CSCO</a>), down over 2%, </li>
<li>Brookfield Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BN#NYSE">BN</a>), up 0.9%, </li>
<li>Talen Energy Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLN#NASDAQ">TLN</a>), up 0.9%, </li>
<li>Nu Holdings Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NU#NYSE">NU</a>), down 7.5%, </li>
<li>Tetra Tech Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TTEK#NASDAQ">TTEK</a>), down over 10%, </li>
<li>StandardAero Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SARO#NYSE">SARO</a>), down 5.5%. </li>
</ul>
Companies slated to report their earnings after Thursday&#8217;s close include Applied Materials Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMAT#NASDAQ">AMAT</a>), Globant S.A. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLOB#NYSE">GLOB</a>), AST SpaceMobile Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ASTS#NASDAQ">ASTS</a>), Post Holdings Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/POST#NYSE">POST</a>). 
Read now: 
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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/41979935/golden-years-for-ma-deals-ahead-under-trump-analysts-highlight-top-10-large-cap-candidates">Golden Years For M&amp;A Deals Ahead Under Trump? Analysts Highlight Top 10 Large-Cap Candidates</a></li>
</ul>
Image:

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Trump Rally Fades As Investors Await Powell's Remarks, Bitcoin Drops Below $90,000: What's Driving Markets Thursday?

To gain an edge, this is what you need to know today.
<figure class="wp-block-image size-large is-resized"><img decoding="async" src="https://thearorareport.com/wp-content/uploads/2024/11/2024-11-13_08h38_15.png" alt="" style="width:624px" /></figure>
<h3 class="wp-block-heading">Extreme Sentiment</h3>
Please <a href="https://thearorareport.com/chart-analysis-stock-inflation-data-cpi-government-efficiency-tlt-mc-11132024">click here</a> for an enlarged chart of iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>).
Note the following:
<ul>
<li>In The Arora Report analysis, bonds have the potential to spoil the stock market's party.&nbsp; Prudent investors need to keep an eye on bonds.&nbsp;&nbsp;</li>
<li>The chart shows that yields are pulling back in the early trade after the release of the Consumer Price Index.</li>
<li>The chart shows that on Trump's win, TLT approached the high band of the support zone.</li>
<li>The chart shows that the momo crowd ran TLT up back into the bottom resistance zone.</li>
<li>The chart shows that TLT failed to breakout above the bottom resistance zone and has now pulled back below the bottom band of the resistance zone.</li>
<li>The chart shows two spot on Arora calls:
<ul>
<li>Contrary Arora call that bonds will fall when the Fed cut rates. This call was made at a time when everyone was buying bonds.</li>
<li>Arora call on the impact of the election on bonds</li>
</ul>
</li>
<li>Inflation data came inline with consensus. &nbsp;Here are the details:
<ul>
<li>Headline CPI came at 0.2% vs. 0.2% consensus.</li>
<li>Core CPI came at 0.3% vs. 0.3% consensus.</li>
</ul>
</li>
<li>In The Arora Report analysis, prudent investors should pay attention to the fact that the 0.3% core inflation rate is 3.6% annualized.&nbsp; The Fed's stated target is 2%.&nbsp;&nbsp;</li>
<li>The extreme positive sentiment is evident from the following this morning in the early trade:
<ul>
<li>Bonds rose and yields fell on inflation data.</li>
<li>Stock futures were lower prior to the data. Aggressive buying came into stocks after the data.&nbsp; Buying is aggressive in Trump linked stocks such as Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>).</li>
<li>&nbsp;Bitcoin was pulling back before CPI was released.&nbsp; Aggressive buying came in after the release of the data.</li>
<li>None of the foregoing would make sense based on the data alone, but Wall Street's thinking is that the Fed will be under pressure from Trump to cut rates in December – the fact that the data does not support a rate cut does not matter because of the political pressure.</li>
</ul>
</li>
<li>Momo gurus are already out with a new reason to buy stocks – inflation was hot but not worse than expected.</li>
<li>Trump has announced that Musk and Ramaswamy will head the Department of Government Efficiency (DOGE).&nbsp; On a lighter note, Doge is the crypto coin that was developed as a joke and subsequently championed by Musk.&nbsp; An indication of extreme sentiment is that the joke coin is now worth more than Ford Motor Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/F#NYSE">F</a>).&nbsp; On a serious note, if Musk is truly able to cut $2T out of the federal budget, expect a recession and a 20% &#8211; 40% drop in the stock market.&nbsp; In The Arora Report analysis, the primary driving force behind this stock market rise is the excess money in the system.&nbsp;&nbsp;</li>
<li>Initial jobless claims and Producer Price Index will be released tomorrow at 8:30am ET and maybe market moving.</li>
</ul>
<h3 class="wp-block-heading">China</h3>
There is a sigh of relief in Chinese and Asian markets in that even though Trump is appointing China hawks, he has not appointed extreme China hawks so far.
<h3 class="wp-block-heading">Magnificent Seven Money Flows</h3>
In the early trade, money flows are positive in Amazon.com, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), NVIDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), and TSLA.
In the early trade, money flows are neutral in Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>).
In the early trade, money flows are negative in Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>),&nbsp;Alphabet Inc Class C (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>) and Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>).
In the early trade, money flows are positive in SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>).
<h3 class="wp-block-heading">Momo Crowd And Smart Money In Stocks</h3>
Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).  The most popular ETF for silver is iShares Silver Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLV#NYSE">SLV</a>).  The most popular ETF for oil is United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>).
<h3 class="wp-block-heading">Bitcoin</h3>
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) is seeing aggressive buying.
<h3 class="wp-block-heading">Protection Band And What To Do Now</h3>
It is important for investors to look ahead and not in the rearview mirror.&nbsp; The proprietary protection band from The Arora Report is very popular.&nbsp; The protection band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges.&nbsp; The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.&nbsp; If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.&nbsp; A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.&nbsp; When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.&nbsp; High beta stocks are the ones that move more than the market.
<h3 class="wp-block-heading">Traditional 60/40 Portfolio</h3>
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.&nbsp; Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever <a href="https://thearorareport.com/generate-wealth-newsletter-benzinga">Generate Wealth Newsletter</a>.

General

AAPL

AMZN

GOOG

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Buying In Stocks On Inflation Data, Musk And Ramaswamy Doge

Investors can breathe a sigh of relief as October inflation data met economists&#8217; expectations, though the annual headline rate showed a slight uptick <a href="https://www.benzinga.com/economics/macro-economic-events/24/11/41938762/october-inflation-rate-rises-to-2-6-as-expected-december-interest-rate-cut-remains-uncertain">from the previous month.</a>
As anticipated, the Consumer Price Index (CPI) rose 2.6% year-over-year in October, marking an increase from September's 2.4% but snapping six straight months of declines.
Excluding food and energy, core inflation held steady at 3.3% for the third consecutive month, highlighting some stickiness in underlying price pressures that remain above the Fed&#8217;s 2% target.
In response to the data, speculators raised their expectations for an interest-rate cut, with increased bets on a 25-basis-point reduction in December. Market-implied probabilities now indicate a 79% likelihood of a December rate cut, up from 58% before the CPI report, as per the CME FedWatch tool.
Following the release, Minneapolis Fed President Neel Kashkari expressed optimism about inflation&#8217;s trajectory, stating on Bloomberg TV, &#8220;I have confidence inflation is headed in the right direction.&#8221; 
On Tuesday, Kashkari had flagged the risk of a rate pause in December if inflation data <a href="https://www.benzinga.com/news/econ-s/24/11/41919011/feds-kashkari-warns-of-december-interest-rate-pause-risk-surprises-to-the-upside">surprises to the upside. </a>
&#8220;I am not yet seeing a lot of upside inflation risks; the bigger risk is getting stuck,&#8221; he added on Wednesday. 
Markets reacted positively, with U.S. equity futures slightly rising, while Treasury yields and the dollar eased amid increased rate-cut expectations.
<h3 class="wp-block-heading">Market Reactions</h3>
<ul>
<li>The S&amp;P 500, as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), was 0.2% higher. </li>
<li>The Nasdaq 100, followed by the Invesco QQQ Trust, Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), inched 0.15% higher.</li>
<li>Small caps outperformed large-cap counterparts, as the iShares Russell 2000 (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), rallied 1.1% minutes ahead the New York open.</li>
<li>Top-performing S&amp;P 500 stocks during the premarket trading were Charter Communications Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CHTR#NASDAQ">CHTR</a>), GE Vernova Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GEV#NYSE">GEV</a>) and Albemarle Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ALB#NYSE">ALB</a>) up 5.7%, 4% and 3.7%, respectively. </li>
<li>Skyworks Solutions Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SWKS#NASDAQ">SWKS</a>), Fair Isaac Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FICO#NYSE">FICO</a>) and Bio-Techne Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TECH#NASDAQ">TECH</a>) were the laggards, down 6.7%, 4.1% and 2.8%, respectively. </li>
<li>Gold prices rose 0.3%, following three straight sessions of declines. </li>
<li>The U.S. dollar index (DXY) slightly eased 0.1%. </li>
<li>Treasury-linked ETFs rose, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) up by 0.7%. </li>
</ul>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="503" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/13092009/image-135-1024x503.png" alt="" class="wp-image-645406" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/13092009/image-135-1024x503.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/13092009/image-135-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/13092009/image-135-768x377.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/13092009/image-135-1536x754.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/13092009/image-135.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/41917731/wall-street-veteran-predicts-sp-500-to-hit-10000-by-2029-roaring-2020s">Wall Street Veteran Predicts S&amp;P 500 To Hit 10,000 By 2029: &#8216;Roaring 2020s&#8217;</a></li>
</ul>

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SWKS

TECH

Markets Breathe Sigh Of Relief After In-Line Inflation Data: Stocks Rebound As Small Caps, Bonds Soar

Wall Street saw the first surge in risk aversion after Donald Trump's election victory last week, as concerns grew over potential tariffs and trade policy shifts spurred by the<a href="https://www.benzinga.com/trading-ideas/movers/24/11/41902202/trumps-china-hawks-rumored-for-top-roles-yuan-hits-3-month-low"> incoming administration's key appointments.</a>
Trump is reportedly considering Sen. Marco Rubio (R-Fla.) for secretary of state and Rep. Mike Waltz (R-Fla.) for national security advisor. Both are vocal hawks on China and NATO, raising concerns of a tougher U.S. stance that could strain key geopolitical and trade relationships.
Adding to the cautious sentiment, investors are bracing for Wednesday's key inflation data release, with economists forecasting the annual rate to hit 2.6% in October.
As of midday trading in New York, none of the major U.S. equity indices posted gains, while small caps underperformed, with the Russell 2000 down 1.5%. Ten out of 11 S&amp;P 500 sectors traded in the red, with consumer staples the only marking tiny gains.
Chinese stocks suffered steep declines, with major U.S.-listed companies falling between 5% and 9% as worries over potential tariffs spooked investors.
The dollar, viewed as a hedge against tariff risk, strengthened, with a currency-weighted index reaching its highest level since May 2024. 
The Japanese yen slipped past 154.7 per dollar, fully erasing gains from the Bank of Japan's August intervention, while the Chinese yuan and the euro also weakened, with the euro falling below $1.06.
Treasury yields climbed, with the 10-year Treasury yield up eight basis points to 4.42%, pushing the popular iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) down 1.2%.
The cryptocurrency market also faced pressure, with Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) down 1.6%. Gold dropped for a third straight day, weighed down by a stronger dollar and higher Treasury yields, as it struggled to attract safe-haven inflows.
<h1 class="wp-block-heading">Tuesday&#8217;s Performance In Major U.S. Indices, ETFs</h1>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day % chg</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>21,057.69</td>
<td>-0.2%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,984.47</td>
<td>-0.3%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>44,071.38</td>
<td>-0.5%</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,399.25</td>
<td>-1.5%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12:20 p.m. ET</figcaption></figure>
According to&nbsp;<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent111224&amp;t=be2bearmibe3na1">Benzinga Pro</a>&nbsp;data:
<ul>
<li>The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) fell 0.4% to $596.29.</li>
<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;fell 0.7% to $440.41.</li>
<li>The tech-heavy&nbsp;Invesco QQQ Trust Series&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) inched 0.4% lower to $511.95.</li>
<li>The&nbsp;iShares Russell 2000 ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) fell 1.6% to $237.82.</li>
<li>The&nbsp;Consumer Staples Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>) outperformed, rising 0.1%. The&nbsp;Materials Select Sector SPDR Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLB#NYSE">XLB</a>) lagged, down 1.6%.</li>
</ul>
<h1 class="wp-block-heading">Tuesday&#8217;s Stock Movers</h1>
Stocks moving on earnings reports were: 
<ul>
<li>Home Depot Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HD#NYSE">HD</a>), down 0.5%,</li>
<li>Shopify Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SHOP#NYSE">SHOP</a>), up 26%, </li>
<li>Tyson Foods Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TSN#NYSE">TSN</a>), up 9%, </li>
<li>Live Nation Entertainment Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LYV#NYSE">LYV</a>), up 4.4%. </li>
</ul>
Companies reporting their results after the close are Spotify Technology S.A. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPOT#NYSE">SPOT</a>), Occidental Petroleum Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OXY#NYSE">OXY</a>), Flutter Entertainment plc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FLUT#NYSE">FLUT</a>), Natera Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTRA#NASDAQ">NTRA</a>). CAVA Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CAVA#NYSE">CAVA</a>).
Read Next:
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<li><a href="https://www.benzinga.com/government/regulations/24/11/41909846/trumps-treasury-pick-frontrunner-scott-bessent-could-shift-wall-street-crypto">Trump&#8217;s Treasury Pick Frontrunner Scott Bessent Could Shift Wall Street, Crypto</a></li>
</ul>
Photo: Owlie Productions via Shutterstock

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Stocks Fall On Tariffs Fears, Dollar Hits 6-Month Peak, Yen Tumbles: What's Driving Markets Tuesday?

Investors looking to bonds and bond ETFs for stability may face heightened volatility due to President-elect Donald Trump's approach to tariffs could put <a href="https://www.benzinga.com/topic/treasury-yields">upward pressure on yields</a>.
What Happened: Bond yields continue to climb after the Fed's 25-basis-point rate cut on Thursday. With the 10-year Treasury yield reached 4.34% in response to market speculation around Trump's fiscal agenda.
This shift complicates the Federal Reserve's efforts to ease borrowing costs, a concern for individual bondholders and bond ETFs investors. The backdrop of tax cuts and anticipated tariffs could limit the Fed's <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/11/41814589/why-trumps-boost-to-treasury-yields-inflation-expectations-may-weaken-feds-efforts-">ability to cut rates deeply</a>.
Also Read: <a href="https://www.benzinga.com/24/11/41886697/two-ideas-famed-stock-market-forecasters-agree-on-for-2025">Why Trump&#8217;s Win Has 2 Market Experts Betting On Small Caps, Financials</a>
Since mid-September, Treasury yields have surged by over 70 basis points, putting additional pressure on bond prices and impacting major bond ETFs. BofA Global Research has adjusted its outlook, with Treasury yields now projected in the 4.25%-4.75% range, Reuters reports. This rising yield environment creates challenges for bonds, as higher yields correspond to declining bond prices, which could erode returns for investors in bond ETFs.
Why It Matters: According to Reuters, the Committee for a Responsible Federal Budget estimates that Trump's proposed fiscal policies will add approximately $7.75 trillion to the national debt in a decade. Economists, banks and analysts have all warned that the <a href="https://www.benzinga.com/personal-finance/24/09/40961812/economists-warn-trumps-plans-for-tax-cuts-tariffs-and-deportation-could-trigger-skyrocketing-inf">plans will worsen inflation</a> and make debt unsustainable.
Bond ETFs, which offer exposure across various segments of the bond market, are likely to feel the impact of these fiscal pressures as bond yields trend higher.
Increased yields may lead to more appealing income for bond ETF investors but could also heighten risks related to price declines as yields continue to rise.
On Monday, 10 prominent bond ETFs were mainly trading lower:
<ul>
<li>Vanguard Total Bond Market ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>): $72.93, down 0.22%.</li>
<li>iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>): $98.26, 0.25% lower.</li>
<li>SPDR Portfolio Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPAB#NYSE">SPAB</a>): $25.34, down 0.3%.</li>
<li>iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LQD#NYSE">LQD</a>): $109.60, 0.23% lower.</li>
<li>Vanguard Short-Term Corporate Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VCSH#NASDAQ">VCSH</a>): $78.30, down 0.09%.</li>
<li>iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>): $91.93, down 0.6%.</li>
<li>Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VCIT#NASDAQ">VCIT</a>): $81.47, 0.22% lower.</li>
<li>iShares U.S. Treasury Bond ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/GOVT#BATS">GOVT</a>): $22.72, down 0.24%.</li>
<li>SPDR Bloomberg High Yield Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JNK#NYSE">JNK</a>): $97.02, down 0.05%.</li>
<li>Vanguard Total International Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BNDX#NASDAQ">BNDX</a>): $49.94, up 0.09%</li>
</ul>
With rising bond yields and fiscal expansion under Trump, bond ETFs could continue to see volatility. 
Bond investors may need to weigh the attraction of higher yields against potential declines in bond prices, particularly in high-yield and long-term Treasury segments, where market shifts are expected to be most pronounced.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/government/regulations/24/11/41885777/how-trumps-tax-cuts-tariffs-animal-spirits-could-shape-sp-500-earnings">How Trump&#8217;s Tax Cuts, Tariffs, &#8216;Animal Spirits&#8217; Could Shape S&amp;P 500 Earnings</a></li>
</ul>
Photo: Shutterstock

BNDX

GOVT

SPAB

VCIT

VCSH

Bond ETFs Slide As Fed Cuts Clash With Trump's Fiscal Agenda

The University of Michigan&#8217;s widely followed consumer survey showed Friday that confidence hit a six-month high in November, driven by an optimistic future outlook <a href="https://www.benzinga.com/topic/inflation">and stable inflation expectations.</a>
<h3 class="wp-block-heading">November Consumer Sentiment Report: Key Highlights</h3>
<ul>
<li>The consumer sentiment index rose from 70.5 in October to 73 points in November, marking a 3.5% monthly surge and surpassing economist estimates – as tracked by TradingEconomics – of 71, preliminary estimates from the University of Michigan showed.</li>
<li>The sub-index for consumer expectations increased from 71.1 to 78.5 points, marking the highest level since July 2021.</li>
<li>The sub-index for current conditions eased from 64.9 to 64.4. </li>
<li>The year-ahead inflation expectations fell from 2.7% to 2.6%, the lowest since December 2020. Long-term inflation expectations inched slightly higher from 3% to 3.1%.</li>
</ul>
<h3 class="wp-block-heading">Economist Takeaways</h3>
The expectations index surged across all dimensions, reaching its highest reading since July 2021. 
&#8220;Expectations over personal finances climbed 6% in part due to strengthening income prospects, and short-run business conditions soared 9% in November. Long-run business conditions increased to its most favorable reading in nearly four years,&#8221; said University of Michigan&#8217;s Surveys of Consumers Director Joanne Hsu. 
Consumer sentiment is now roughly 50% higher than its June 2022 low, but remains below pre-pandemic readings, Hsu said. She added that interviews for the release concluded Monday and do not include reactions to the presidential election. 
<h3 class="wp-block-heading">Market Reactions</h3>
Stocks were little moved Friday, with major U.S. equity indices hovering broadly around the flatline during New York morning trading.
Small caps, tracked by the iShares Russell 2000 ETF (ARCA: IWM, inched 0.3% higher.
Real estate and utilities were the best performing sectors, up 1.3% and 1.2%, respectively. 
Treasury yields continued to fall on Friday, with the 10-year yield down by 5 basis points. As such, long-dated bond ETFs rallied, with the iShares 20 + Year Treasury bond ETF (NASAQ: TLT) rallied 1.3%. 
Read Next:
<ul>
<li><a href="https://www.benzinga.com/news/large-cap/24/11/41826586/wall-street-closes-at-record-highs-after-reassurance-from-powell-magnificent-7-hit-17-trillion-tre">Wall Street Hits Record Highs After Powell&#8217;s Speech, Lifts Magnificent 7 Stocks To $17 Trillion In Historic Trading</a></li>
</ul>
Photo via Shutterstock.

US Consumer Sentiment Rises More Than Predicted To 6-Month Highs, Inflation Expectations Hit 4-Year Low

To gain an edge, this is what you need to know today.
<figure class="wp-block-image size-large is-resized"><img decoding="async" src="https://thearorareport.com/wp-content/uploads/2024/11/2024-11-07_08h30_03.png" alt="" style="width:624px" /></figure>
<h3 class="wp-block-heading">Bonds Fall On Trump Win</h3>
Please <a href="https://thearorareport.com/chart-analysis-stock-market-fed-interest-rate-bonds-support-zone-tlt-mc-11072024">click here</a> for an enlarged chart of iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>).
Note the following:
<ul>
<li>After Trump's win, bonds are front and center.</li>
<li>The chart shows when the contrary Arora call was made that bonds would fall.&nbsp; That call was made at a time when everyone was predicting that bonds would rise.&nbsp;</li>
<li>The chart shows when the Arora call was made about the election.&nbsp; We wrote in the <a href="https://blog.thearorareport.com/rising-yields-100824/">Morning Capsule on October 8</a>, "In the event of a one party sweep, TLT can potentially fall to the bottom support zone."</li>
<li>The chart shows that the second Arora call on bonds has proven accurate after Trump's win.</li>
<li>The chart shows when Trump won the election.</li>
<li>The chart shows that on Trump's win, TLT gapped down and opened close to the top and of the bottom support zone.&nbsp; Yesterday's bar does not show premarket data.&nbsp; In the premarket, TLT touched the top band of the support zone.&nbsp; On The Arora Report charts, premarket data is included on the current day, but not on the previous days.&nbsp; This methodology provides the most clarity.</li>
<li>The FOMC will announce its rate decision at 2pm ET, followed by Powell's press conference at 2:30pm ET.</li>
<li>The consensus is that the Fed will cut rates by 25 bps.</li>
<li>In The Arora Report analysis, the Fed could not possibly be happy about the large drop in bonds after the last rate cut.&nbsp; We will be paying careful attention to what Powell says about the drop in bonds in his press conference.&nbsp; If Powell says anything about this subject, it will be the most important new information that can be gleaned today.&nbsp;&nbsp;</li>
<li>Most institutional investors and many retail investors have suffered massive losses in bonds. &nbsp;It is important to remember that the largest amount of money is still managed using the 60/40 portfolio as a starting point.&nbsp; This means 60% in stocks and 40% in bonds.&nbsp; The Arora Report has long shown that following the protection band is heads and shoulders above following the 60/40 portfolio.&nbsp; Nonetheless, the dogma of 60/40 remains popular.&nbsp; This is the reason we publish information on 60/40 portfolios.&nbsp; For those following the 60/40 portfolio, The Arora Report call has been to limit the duration to less than five years.&nbsp; The Arora Report call on duration has been consistent at a time when a vast majority of money managers were significantly increasing duration. The longer the bond duration, the larger the losses investors have suffered.</li>
<li>In The Arora Report analysis, after Trump's election the Fed is faced with two important issues:
<ul>
<li>In The Arora Report analysis, depending upon how Trump implements his tariff plan, it may add 0.5% &#8211; 1% to inflation.&nbsp;&nbsp;</li>
<li>According to the nonpartisan Committee for a Responsible Federal Budget, Trump's tax plans will increase the national deficit by $7.8T over the next 10 years.&nbsp; All of this deficit will have to be financed by borrowing.&nbsp; This will increase the supply of Treasuries.&nbsp; A higher supply of Treasuries will lead to higher interest rates on the long end, unless the Fed decides to manipulate it with quantitative easing or some other artificial method.</li>
</ul>
</li>
<li>At a time when the stock market is at an all time high and bonds are suffering major losses, there is not good news on the economic data front.&nbsp;&nbsp;
<ul>
<li>Unit labor costs are spiking.&nbsp; Q3 Unite Labor Costs &#8211; Preliminary came at 1.9% vs. 0.5% consensus.</li>
<li>As of this writing, the momo crowd is oblivious.  However, expect smart money to pay attention to this important, highly inflationary data. Also expect the Fed to pay attention to this data.</li>
</ul>
</li>
<li>Initial jobless claims came at 221K vs. 222K consensus.&nbsp; This indicates that the employment picture remains strong, especially at the low end.</li>
<li>In The Arora Report analysis, there is another important question that the Fed will have to face.  Trump plans to deport undocumented immigrants.  According to the Department of Homeland Security, there are about 11M undocumented immigrants in the U.S. What happens to labor supply at the low end if 11M workers are taken out of the workforce?  What does it do to inflation?  What does it do to economic growth, and in turn the stock and bond markets? </li>
</ul>
<h3 class="wp-block-heading">England</h3>
The Bank of England has cut interest rates.&nbsp; The key interest has been reduced to 4.75% from 5%.
This is the first cut by a major central bank after Trump's election. &nbsp; Investors should keep an eye on how the European Central Bank and the Bank of Japan act after Trump's election.&nbsp; Remember, the U.S. economy is intertwined with the global economy.&nbsp;&nbsp;
<h3 class="wp-block-heading">Magnificent Seven Money Flows</h3>
In the early trade, money flows are positive in Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Amazon.com, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), Alphabet Inc Class C (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>), Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>), Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), and NVIDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>).
In the early trade, money flows are negative in Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>).
In the early trade, money flows are positive in SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>).
<h3 class="wp-block-heading">Momo Crowd And Smart Money In Stocks</h3>
Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).  The most popular ETF for silver is iShares Silver Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLV#NYSE">SLV</a>).  The most popular ETF for oil is United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>).
<h3 class="wp-block-heading">Bitcoin</h3>
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) is range bound.
<h3 class="wp-block-heading">Protection Band And What To Do Now</h3>
It is important for investors to look ahead and not in the rearview mirror.&nbsp; The proprietary protection band from The Arora Report is very popular.&nbsp; The protection band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges.&nbsp; The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.&nbsp; If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.&nbsp; A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.&nbsp; When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.&nbsp; High beta stocks are the ones that move more than the market.
<h3 class="wp-block-heading">Traditional 60/40 Portfolio</h3>
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.&nbsp; Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever <a href="https://thearorareport.com/generate-wealth-newsletter-benzinga">Generate Wealth Newsletter</a>.

Bonds And Fed Front And Center As Bonds Approach Bottom Support Zone After Trump Win

Longer-dated U.S. Treasury bonds, tracked by the popular iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), saw their steepest decline in over a year on Wednesday, plummeting more than 2.6%, as investors offloaded fixed-income assets amid rising expectations of wider budget deficits and higher inflation, spurred by Donald Trump&#8216;s victory <a href="https://www.benzinga.com/topic/donald-trump">in the presidential election. </a>
This bond sell-off comes one day before a pivotal Federal Reserve interest rate decision scheduled for 2 p.m. ET Thursday.
The Federal Reserve is broadly expected to cut interest rates by 25 basis points to a range of 4.5%–4.75%, a move fully priced in by market participants, according to the CME FedWatch Tool.
While the rate decision itself is almost certain, investors will be more focused on Fed Chair Jerome Powell's remarks, which may offer crucial insights into the Fed&#8217;s stance on the evolving inflation and fiscal policy.
Fed watchers are keen to highlight if a potential shift in fiscal policy under Trump could prompt the Fed to modify its approach.
Economists broadly agree that tariffs and tax cuts are likely to drive up inflation, potentially leading to a more hawkish response from the Federal Reserve. JPMorgan analysts estimate that universal tariffs, coupled with domestic tax cuts, could increase U.S. inflation by as much as 2.4%. 
Goldman Sachs chief economist Jan Hatzius suggests that Trump's policies might keep core inflation above 3% by 2025, well above the Fed's 2% target. Hatzius highlighted that these factors &#8220;might delay cuts that would otherwise come more swiftly.&#8221;
Read also: <a href="https://www.benzinga.com/economics/macro-economic-events/24/11/41772701/trumps-historic-return-7-ways-his-second-term-could-impact-the-us-economy">Trump&#8217;s Historic Return: 7 Ways His Second Term Could Impact The US Economy</a>
<h3 class="wp-block-heading">Fed Expected To Cut Rates In November, But All Eyes Are On What Comes Next</h3>
"We expect a 25-basis-point cut in November, with Powell likely to maintain an optimistic tone," said Bank of America rates analyst Mark Cabana. He explained that softer-than-expected jobs data for October, combined with downward payroll revisions, were key factors solidifying the case for this November rate cut.
Bank of America also indicated that these labor data trends increase the likelihood of another rate cut in December.
Goldman Sachs economist David Mericle highlighted that recent inflation data has eased concerns about inflation reaccelerating. &#8220;Better inflation news has alleviated fears of sticky inflation from earlier in the year,&#8221; he said. He also emphasized strong Q3 GDP growth as a sign of resilience in the U.S. economy, despite a cooling labor market.
Goldman Sachs now forecasts four additional cuts in the first half of next year, bringing rates down to 3.25%–3.5%.
Mericle acknowledged "uncertainty about both the pace and final rate" of future cuts, noting that the Fed&#8217;s path forward will depend heavily on evolving economic data.
<h3 class="wp-block-heading">Will Trump Pressure Powell on Interest Rates?</h3>
During Thursday&#8217;s Q&amp;A, Powell will likely face questions on whether the Fed plans to act preemptively or reactively in response to changing fiscal dynamics.
Investors are eager to understand if the Fed will proactively address anticipated inflation or wait for economic data to reflect any significant change.
Powell, whose term expires in 2026, could also be questioned about the Fed's independence. In his previous term, Trump frequently pressured the Fed to lower rates and has hinted that, if re-elected, he would not renew Powell's term. 
During Trump's first presidency, he issued over hundreds of tweets criticizing Fed policy, often urging for lower rates, according to data shared by the Brookings Institution. 
<h3 class="wp-block-heading">How Could Markets React To November Fed Meeting?</h3>
Market data suggest a 70% probability of another 25-basis-point cut at the Fed's Dec. 18 meeting, down slightly from 77% the previous day.
If Powell delivers dovish remarks that reinforce expectations of a December rate cut, risk assets could rally. The S&amp;P 500, represented by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), might respond positively, while small-cap stocks, tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), may extend gains following Wednesday's rally.
Conversely, if Powell signals hesitation about further rate cuts, particularly in December, and indicates a potential inclination toward addressing rising inflation expectations, investors could be disappointed, potentially putting downward pressure on the markets.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/general/politics/24/11/41783357/how-did-s-p-500-sectors-perform-during-trumps-first-term-could-this-time-be-different">How Did S&amp;P 500 Sectors Perform During Trump&#8217;s First Term? Could This Time Be Different?</a></li>
</ul>
Image: Shutterstock

US Treasuries Take Sharpest Plunge In A Year Ahead Of Fed Meeting: Could Powell Adjust Stance In Response To Trump?

To gain an edge, this is what you need to know today.
<figure class="wp-block-image size-large is-resized"><img decoding="async" src="https://thearorareport.com/wp-content/uploads/2024/11/2024-11-05_08h17_44.png" alt="" style="width:624px" /></figure>
<h3 class="wp-block-heading">The Plan</h3>
Please <a href="https://thearorareport.com/chart-analysis-stock-market-election-opportunitites-tlt-mc-11052024">click here</a> for an enlarged chart of iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>).
Note the following:
<ul>
<li>Going into the election, the most important chart is that of the bond market.&nbsp; The reason is the reaction to the election from the bond market is likely to be correct compared to the first reaction from the stock market.</li>
<li>The chart shows the contrary Arora call that bonds would fall when the Fed cut interest rates by 50 bps.&nbsp; At the time of the contrary Arora call, everyone was predicting that bonds would go up.</li>
<li>The chart shows that the Arora call has proven spot on.</li>
<li>The chart shows that bonds are now at the bottom band of the top support zone.</li>
<li>Consider keeping this chart handy and see if bonds rally above the top band of the top support zone or they break down and move towards the bottom support zone.</li>
<li>In addition to understanding the chart of the bond market, the following is the essential foundation of how to capture opportunities after the election.
<ul>
<li>Wall Street positioning.&nbsp; Positioning is an important Wall Street mechanic.</li>
<li>Retail investor positioning</li>
<li>Your positioning</li>
</ul>
</li>
<li>Wall Street is positioned for the following:
<ul>
<li>A significant rally in stocks, bonds, gold, and the dollar after the election</li>
<li>Senate control switching from Democrats to Republicans</li>
<li>House control switching from Republicans to Democrats</li>
<li>An even probability of a Trump win or a Harris win.</li>
</ul>
</li>
<li>Here is the positioning of retail investors:
<ul>
<li>Republican retail investors are heavily positioned in the Trump trade.</li>
<li>Democrat retail investors are heavily positioned in the Harris trade.</li>
</ul>
</li>
<li>The problem with positioning of retail investors is that if their candidate wins, they will do fine.&nbsp; However, if the other candidate wins, they will incur massive losses. This is not the way to maximize the wealth you generate over your lifetime. It is important to keep your politics separate from your investing.&nbsp;&nbsp;</li>
<li>In The Arora Report analysis, Wall Street is oblivious to the simple fact that the stock market has been front running the election.&nbsp;&nbsp;
<ul>
<li>Historically, there is anxiety and a pullback before the election in September and October.&nbsp; Historically, when the election is over, the overhang of anxiety lifts irrespective of who wins, and the stock market rallies.</li>
<li>This time is different because there has not been any anxiety, and there was not a pullback in September and October.&nbsp; The reason is that Wall Street has been front running the election.</li>
<li>There is no recent historical precedent of Wall Street front running the election.</li>
<li>Historically smart money uses a combination of hedging and lightening up positions before the election.&nbsp; This time is different in that smart money has been aggressively hedging, more than any other recent election, but has not been lightening up positions.</li>
<li>Even though there is no precedent of election front running, there are hundreds of precedents of Wall Street front running less important events.&nbsp; A typical reaction after the event is over is to sell the news.</li>
</ul>
</li>
<li>In The Arora Report analysis, prudent investors should be aware that there is a fair probability of a sell the news reaction.&nbsp; However, the probability of a rally is higher because of the power of the momo crowd.&nbsp;</li>
<li>Going into the election, investors should be very cognizant of the positioning of their own portfolios.&nbsp; The Arora Report portfolios are well balanced between the Harris trade and the Trump trade.&nbsp;&nbsp;</li>
<li>The Arora Report portfolios are also sufficiently protected with the protection band and there is sufficient cash to take advantage of new opportunities.&nbsp; Investors who are not holding enough cash will not be able to take advantage of new opportunities.</li>
</ul>
<h3 class="wp-block-heading">Magnificent Seven Money Flows</h3>
In the early trade, money flows are positive in Alphabet Inc Class C (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>), Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>), NVIDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), and Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>).
In the early trade, money flows are neutral in Amazon.com, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) and Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>).
In the early trade, money flows are positive in SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>).
<h3 class="wp-block-heading">Momo Crowd And Smart Money In Stocks</h3>
Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).  The most popular ETF for silver is iShares Silver Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLV#NYSE">SLV</a>).  The most popular ETF for oil is United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>).
<h3 class="wp-block-heading">Bitcoin</h3>
Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) is range bound.
<h3 class="wp-block-heading">Protection Band And What To Do Now</h3>
It is important for investors to look ahead and not in the rearview mirror.&nbsp; The proprietary protection band from The Arora Report is very popular.&nbsp; The protection band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges.&nbsp; The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.&nbsp; If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.&nbsp; A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.&nbsp; When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.&nbsp; High beta stocks are the ones that move more than the market.
<h3 class="wp-block-heading">Traditional 60/40 Portfolio</h3>
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.&nbsp; Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever <a href="https://thearorareport.com/generate-wealth-newsletter-benzinga">Generate Wealth Newsletter</a>.

Here Is How Investors Can Capture Opportunities From The Election

The U.S. services sector's economic momentum is firing at all cylinders, with business activity in October reaching its strongest level <a href="https://www.benzinga.com/news/econ-s">in over two years.</a>
According to the Institute for Supply Management, the Services PMI surged to 56% in October 2024, up from 54.9% in September, defying expectations of a dip to 53.8%.
This result marks the fastest pace of expansion in the U.S. services sector since August 2022. The ISM Services PMI has shown growth in 20 of the past 22 months since January 2023, with October's reading standing 3.7 percentage points above the 2024 average of 52.3%.
&#8220;The increase in the Services PMI&nbsp;in October was driven by boosts of more than 4 percentage points for both the Employment and Supplier Deliveries indexes. The Business Activity and New Orders indexes both dropped by at least 2 percentage points. Each of the four subindexes are now above their averages for 2024,&#8221; stated Steve Miller, chair of the ISM Services Business Survey Committee, said.
<h3 class="wp-block-heading">ISM Services PMI For October: Key Highlights</h3>
<ul>
<li>The subindex for Business Activity eased from 59.9% to 57.2% in October.</li>
<li>The subindex for New Orders eased from 59.4% to 57.4% in October. </li>
<li>The subindex for Prices eased from 59.4% to 58.1%. </li>
<li>The subindex for Employment rose from 48.1% to 53%, well above the expected 48%. The outcome marked the highest level in employment index since September 2023. </li>
</ul>
&#8220;Concerns over political uncertainty were again more prevalent than the previous month. Impacts from hurricanes and ports labor turbulence were mentioned frequently, although several panelists mentioned that the longshoremen's strike had less of an impact than feared due to its short duration,&#8221; Miller added. 
<h3 class="wp-block-heading">Market Reactions</h3>
On Tuesday, U.S. stocks rebounded as investors reacted positively to the latest ISM Services PMI data, alleviating earlier political concerns as Americans headed to the polls to elect the 47th president.
The S&amp;P 500, represented by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), rose 0.8%. The tech-heavy Nasdaq 100, tracked by the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), rallied nearly 1%, while the SPDR Dow Jones Industrial Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) edged 0.6% higher.
Yields on 10-year Treasury bonds rose 7 basis points to 4.36%. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) fell 0.5%. 
The U.S. dollar index — as tracked by the  Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>) — weakened 0.5%.
Now Read:
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<li><a href="https://www.benzinga.com/markets/asia/24/11/41722178/if-trump-and-republicans-sweep-dollar-may-climb-7-but-harris-win-could-bring-5-drop-says-jpmorgan">If Trump And Republicans Sweep, Dollar May Climb 7% — But Harris Win Could Bring 5% Drop, Says JPMorgan</a></li>
</ul>
Image: Shutterstock

Treasuries

US Services Sector Gauge Rises More Than Expected To Over 2-Year Highs As Employment Index Defies Hurricane Shocks

A widely watched gauge of bond market volatility has surged to its highest level in over a year as American voters cast their ballots in one of the closest presidential <a href="https://www.benzinga.com/topic/2024-election">races in recent history. </a>
The ICE BofAML U.S. Bond Market Option Volatility Estimate Index, or &#8220;MOVE&#8221; index, closed at 136 on Monday, reaching levels last seen in early October 2023. 
This spike in the MOVE index highlights mounting anxiety in the bond market, driven by political uncertainty and fears of inflationary fiscal policies.
<h3 class="wp-block-heading">What Is The MOVE Index?</h3>
The MOVE index, often described as the VIX for bonds, measures expected volatility in the Treasury market based on options pricing. 
Like the VIX, which tracks volatility in the equity market, the MOVE index is seen as a &#8220;fear gauge&#8221; for fixed-income investors. 
Higher MOVE readings indicate increased uncertainty about future bond price movements, reflecting traders&#8217; fears around interest rates, inflation, and broader economic conditions.
See Also: <a href="https://www.benzinga.com/money/guide-to-volatility-indices-vix">Beginners Guide to VIX or Volatility Indices</a>
<h3 class="wp-block-heading">Election Jitters Fuel Bond Market Anxiety</h3>
The U.S. presidential election has investors on edge, with polls showing one of the tightest races in modern American history. 
Neither Vice President Kamala Harris nor ex-President Donald Trump held a meaningful lead in critical battleground states ahead of Nov. 5, <a href="https://www.nytimes.com/interactive/2024/us/elections/polls-president.html">wrote</a> Nate Cohn, chief political analyst at the New York Times. 
&#8220;In the history of modern polling, there's never been a campaign where the final polls showed such a close contest,&#8221; he added.
The possibility of a prolonged, contentious result has amplified concerns in the bond market, where volatility has jumped 51% since late September. 
Fixed-income investors are also weighing the potential fiscal impact of each candidate&#8217;s policies, especially if the winner's administration fuels inflation and adds to the federal debt.
According to the Committee for a Responsible Federal Budget (CRFB), Trump's spending plans could increase the national debt by $7.75 trillion over the next decade, driving the debt-to-GDP ratio to 143% by 2035. By contrast, Kamala Harris's proposals would add $3.95 trillion to the debt, resulting in a debt-to-GDP ratio of approximately 134% by the same year.
Chart: Bond Volatility Index Has Risen By Over 50% Since Late-September
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="501" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31-1024x501.png" alt="" class="wp-image-630321" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31-1024x501.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31-768x376.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31-1536x752.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/11/05084449/image-31.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Trump's Tariff Plans Stoke Inflation Fears</h3>
Under a Trump administration, inflation could rise if proposed tariffs on Chinese imports and other goods come into effect. 
Trump has floated a 60% tariff on Chinese products and a universal 10% tariff, policies which JPMorgan analysts estimate could drive inflation up by as much as 2.4% in a worst-case scenario. 
&#8220;Tariffs are inflationary,&#8221; IMF deputy managing director Gita Gopinath warned in October.
With inflation a growing concern, Treasury yields have been on an upward trajectory, as investors demand higher returns to offset potential future price increases. 
Yields on the 10-year Treasury bond have risen by 50 basis points last month and hit 4.33% on Tuesday. 
<h3 class="wp-block-heading">&#8216;Bond Vigilantes&#8217; Are Back</h3>
The bond market&#8217;s reaction to these uncertainties has been swift and severe. 
&#8220;Nothing seems to be stopping U.S. Treasury bond yields from rising,&#8221; said veteran Wall Street investor Ed Yardeni. 
&#8220;The Bond&nbsp;Vigilantes&nbsp;have been voting early (and voting often) by selling US Treasury notes and bonds,&#8221; he added. 
The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), which tracks long-dated Treasuries, fell nearly 6% in October 2024.
With both candidates likely to enact substantial stimulus, Yardeni stated, &#8220;The bond market is tightening the economy itself,&#8221; as investors anticipate inflation and higher interest rates. 
Yardeni indicated this surge in yields could push the 10-year Treasury into the 5% range, a level not seen since before the financial crisis.
Now Read:
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<li><a href="https://www.benzinga.com/news/earnings/24/11/41740288/us-stocks-set-for-cautious-start-as-investors-brace-for-volatility-on-election-day-expert-points-to">US Stocks Set For Cautious Start As Investors Brace For Volatility On Election Day: Expert Points To &#8216;Pretty Well Overall&#8217; Historical Performance</a></li>
</ul>
Image: Shutterstock

Bond Market Fear Gauge Soars To 1-Year High Ahead Of US Election Results: 'Bond Vigilantes Have Been Voting Early'

Gold prices surged 1% on Tuesday, hitting a new all-time high of $2,770 per ounce, as investors pour into the commodity amid mounting concerns over ballooning <a href="https://www.benzinga.com/news/econ-s">deficits and political uncertainty. </a>
Up 34.2% year-to-date, gold is on track for its strongest annual performance since 1979, the third best gain in the last half a century.
Gold has outperformed traditional asset classes, such as stocks — the S&amp;P 500 has climbed 23% this year — and bonds, with the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), a benchmark for long-dated U.S. Treasury bonds, down 7%.
The precious metal, as tracked by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), is on pace to close its fourth consecutive month — and seventh of the last eight weeks — in positive territory, underscoring the strong bullish momentum driving investors.
<h3 class="wp-block-heading">Chart: 2024 Shapes Up To Be Gold&#8217;s Third Best Year In The Last 50</h3>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="486" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303-1024x486.png" alt="" class="wp-image-619845" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303-1024x486.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303-300x142.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303-768x364.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303-1536x729.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/29115952/image-303.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Gold&#8217;s Break From Traditional Correlations</h3>
Gold's recent rally has diverged from its usual relationship with both the U.S. dollar and Treasury yields. 
Typically, a stronger dollar or rising Treasury yields put downward pressure on gold prices. The logic is straightforward: as a non-yielding asset, gold becomes less attractive when risk-free U.S. Treasury bonds start offering higher real returns. In such environments, investors usually favor bonds over gold, reducing demand for the precious metal.
Lately, however, the opposite has occurred. Despite a stronger dollar and rising Treasury yields, gold prices have continued to climb, defying the usual negative correlation. 
In October alone, gold rose 5.1%, while the U.S. Dollar Index (DXY) climbed 3.6% and the 10-year Treasury yield jumped more than 50 basis points to 4.35%.
This decoupling suggests that investors are turning to gold for reasons beyond the traditional factors. 
Otavio Costa, a macro strategist at Crescat Capital, indicated that gold is now signaling potential future inflation risks that could complicate the Federal Reserve&#8217;s policy options. 
"Gold is rising as the market begins to price in the likelihood of a Fed forced to cut rates further, despite persistent inflation," Costa said. 
"Gold is also signaling the potential for another wave of inflation ahead, making the Fed's job even harder as interest payments for federal and local governments are already nearing 5% of GDP," he said. 
According to Costa, "the genie has been out of the bottle since late 2020, and inflationary trends remain deeply rooted in the economy.&#8221;
<h3 class="wp-block-heading">Deficit Concerns Add Fuel To Gold&#8217;s Rally</h3>
A major driving factor behind the recent surge in gold: mounting fiscal concerns, particularly in the United States.
With trillion-dollar annual deficits becoming the new norm, economists warn that government spending is becoming unsustainable. 
Michael Gayed, CFA, said: "I don't think there's much question that trillion-plus dollar annual deficits are becoming the norm more than the exception."
Further complicating the fiscal outlook are political developments, with neither Democrats nor Republicans showing a strong commitment to reducing the national debt. 
Analysts predict that increased spending on defense, climate adaptation and demographic challenges will push budgets even further into the red.
Bank of America analyst Michael Widmer recently wrote: &#8220;Gold may be the last perceived safe haven asset standing&#8221; given the reluctance of governments to curb spending.
<h3 class="wp-block-heading">Global Policy And Gold As The Last &#8216;Safe Haven&#8217;</h3>
Widmer's view reflects a broader consensus among analysts that gold is becoming the preferred safe-haven asset amid escalating debt and global policy trends favoring fiscal expansion. 
The IMF estimates that new spending requirements across advanced economies could reach 7%-8% of GDP annually by 2030.
U.S. budget deficits are not forecasted to fall below 6% of the GDP in any year for the remainder of the decade, as per the latest IMF Fiscal Monitor estimates. 
Should markets start questioning the sustainability of these deficits, gold could attract even more investment as a reliable store of value.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41495286/deficit-strain-in-washington-will-get-worse-imf-warns-national-debt-projections-rev">Deficit Strain In Washington Will Get Worse, IMF Warns: National Debt Projections Revised Higher, Stabilization Unlikely By 2029</a></li>
</ul>
Photo via Shutterstock.

Gold Hits Record Highs, Defies Market Gravity: Why The Precious Metal Is Decoupling From Treasury Yields

Yields on longer-dated U.S. 30-year Treasury bonds have breached the 4.50% threshold, a significant level last witnessed on July 25, raising alarms <a href="https://www.benzinga.com/markets">across global financial markets. </a>
The 10-year U.S. Treasury yield has also seen a notable increase of 63 basis points, climbing to 4.25% since the Federal Reserve&#8217;s meeting on Sept. 18.
This surge in yields reflects mounting concerns over fiscal sustainability and resuming inflationary pressures, as stocks tumbled broadly in response. 
The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) declined by an additional 0.3%, marking its fifth negative week in the last six and approaching a 10% drop from mid-September highs.
Wall Street, meanwhile, is facing its third consecutive day of declines. The S&amp;P 500, as represented by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), is poised to end a <a href="https://www.benzinga.com/markets/equities/24/10/41497765/wall-street-slumps-for-third-straight-day-as-investor-sentiment-fades-dollar-strength-resumes-bo">six-week winning streak.</a>
As the presidential election approaches in less than two weeks, investor apprehension appears to center on the potential for further expansionary fiscal policies in the U.S., which could exacerbate the already substantial federal budget deficit.
<h3 class="wp-block-heading">Bond Vigilantes Are Back</h3>
&#8220;The Bond Vigilantes are voting early,&#8221; stated Wall Street veteran investor Ed Yardeni in a note Wednesday.
According to the expert, bond Vigilantes appear to be signaling disapproval of Fed Chair Jerome Powell&#8216;s Sept. 18 decision to implement a 50 basis point rate cut.
This move, viewed by some as premature, has raised fears that the Fed may inadvertently stoke further economic overheating. 
Yardeni maintained his forecast for bond yields to remain in the 4.00% to 4.50% range, but he expressed caution about the Fed&#8217;s ability to balance growth and inflation risks in the near term.
&#8220;The Bond Vigilantes may also be voting against Washington, figuring that no matter which party wins the White House and the Congress, fiscal policies will bloat the already bloated federal government budget deficit and heat up inflation. The next administration will face net interest outlays of over $1 trillion on the ballooning federal debt,&#8221; he added.
<h3 class="wp-block-heading">Macro Concerns: The U.S. Dollar And US Budget Deficits</h3>
Otavio Costa, macro strategist at Crescat Capital, raised concerns over the long-term trajectory of the U.S. dollar. In a pointed post on X, Costa highlighted the &#8220;magazine cover curse&#8221; phenomenon, referencing The Economist&#8217;s October cover depicting the U.S. dollar as a rocket soaring skyward—a symbol of America's economic dominance.
Costa warned that while the U.S. dollar might appear strong in the short term, the substantial share of GDP devoted to servicing debt (around 5%) could lead to a dollar depreciation against other fiat currencies over the next one to three years.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Magazine cover curse alert &#x1f6a8; I&#39;m seriously concerned about the risk of the US dollar relative to other fiat currencies over the next 1-3 years. And no, I'm not talking about hard assets — that devaluation is happening as I type this. My concern lies with the potential… <a href="https://t.co/E38AjqpQ1G">pic.twitter.com/E38AjqpQ1G</a>
&mdash; Otavio (Tavi) Costa (@TaviCosta) <a href="https://twitter.com/TaviCosta/status/1848870862801539442?ref_src=twsrc%5Etfw">October 22, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
Adding to the growing concern, the International Monetary Fund (IMF) released a more pessimistic <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41495286/deficit-strain-in-washington-will-get-worse-imf-warns-national-debt-projections-rev">fiscal forecast for the U.S. on Wednesday. </a>
The IMF now expects the U.S. budget deficit to reach 7.6% of GDP in 2024, up from its previous April estimate of 6.5%. The outlook for 2025 has also deteriorated, with the deficit projected to hit 7.3% of GDP, slightly higher than the prior 7.1% forecast. 
The IMF emphasized that the U.S. deficit will likely remain above 6% of GDP until at least 2029, driven by rising debt servicing costs and persistent fiscal imbalances. It warned that both the U.S. and China face a &#8220;low probability&#8221; of stabilizing their debt levels by the end of the decade.
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Photo: Shutterstock

30-Year Treasury Yield Tops 4.50%, Raising Red Flags For Markets: 'Bond Vigilantes Are Voting Early,' Says Veteran Investor

A recent surge in mortgage rates is weighing heavily on homebuyers, causing a sharp and sustained drop in mortgage <a href="https://www.benzinga.com/money/mortgages">applications across the U.S. </a>
This downturn marks the fourth consecutive weekly decline, signaling growing pressure from elevated borrowing costs.
<h3 class="wp-block-heading">Mortgage Applications Plummet for Fourth Straight Week</h3>
For the week ending Oct. 18, mortgage applications in the U.S. tumbled by 6.7%, extending a 17% plunge from the previous week, according to data shared Wednesday by the Mortgage Bankers Association.
This represents the fourth straight week of contraction in mortgage demand, as the recent uptick in interest rates to two-month highs has increasingly discouraged potential buyers from entering the housing market.
Notably, applications to refinance existing home loans, which tend to be more sensitive to short-term interest rate changes, dropped 8.5% for the week, extending a prior 26% plunge. Applications for new home purchases also declined by 5%, reflecting a broader weakness in housing market activity.
The drop in activity coincides with a significant rise in key interest rates, driven by robust economic data and market expectations of a less accommodative stance by the Federal Reserve for the rest of 2024.
<h3 class="wp-block-heading">Mortgage Rates Remain Elevated</h3>
The average interest rate for a 30-year fixed-rate mortgage with conforming loan balances (up to $766,550) remained stable at 6.52%, close to its two-month high.
For larger loans (jumbo mortgages, which cover amounts above $766,550), the rate edged down slightly to 6.73%, a marginal drop of 3 basis points from the previous week.
Last week, Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, highlighted, &#8220;Demand is holding up to an extent for prospective first-time buyers. The recent uptick in rates has put a damper on applications.&#8221;
Mortgage rates have surged in tandem with rising long-term Treasury yields, which had been steadily climbing before leveling off last week.
The rising trend in Treasury yields resumed this week, further clouding the outlook for mortgage demand. 
Yields on 30-year Treasury bonds have jumped by over 10 basis points to 4.5% as of Wednesday. Given that Treasury yields serve as a key benchmark for mortgage rates, any further increases could intensify pressure on already weakened mortgage demand.
<h3 class="wp-block-heading">Impact On Mortgage-Related Stocks</h3>
The cooling of the housing market is also evident in the declining performance of mortgage-related stocks.
Both the iShares Mortgage Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REM#NYSE">REM</a>) and the VanEck Mortgage REIT Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MORT#NYSE">MORT</a>) have seen significant declines, falling for two consecutive days this week. 
Since their highs in September, both ETFs have shed about 8-9% in value, underscoring the negative impact of declining demand in the market performance of mortgage real estate investment trusts (REITs).
The popular iShares 20+ Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NYSE">TLT</a>), which tracks long-term Treasury bonds, has dropped 2% for the week and is down 9.5% from its late September levels. 
Looking ahead, market participants remain focused on the Federal Reserve&#8217;s next move. 
The CME FedWatch tool, which tracks market-implied expectations for Federal Reserve policy, shows an 87% chance that the central bank will cut interest rates by 25 basis points at its next meeting on Nov. 7.
Read Next:
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<li><a href="https://www.benzinga.com/markets/bonds/24/10/41455678/gold-on-track-for-best-year-since-1979-veteran-investor-says-sell-bonds-buy-gold">Gold On Track For Best Year Since 1979: Veteran Investor Says &#8216;Sell Bonds, Buy Gold&#8217;</a></li>
</ul>
Image created using artificial intelligence via Midjourney.

REIT

Real Estate

MORT

iShares FTSE NAREIT Mortgage PLUS Capped Index Fund

Mortgage Applications Fall For Fourth Straight Week As High Rates Squeeze Homebuyers

With rising geopolitical tensions and the Federal Reserve shifting toward rate cuts, 2024 is shaping up to be gold's best year in over four decades, reigniting strong investor demand <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/10/41390144/gold-could-reach-3-000-by-2025-bank-of-america-analyst-says-ultimate-perceived-safe">for the precious metal.</a>
Gold, as tracked by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), has surged 33% year-to-date as of Oct. 22, positioning it for its strongest year since 1979, when it spiked 136%.
In stark contrast, U.S. long-dated Treasury bonds are suffering. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) is down 6.7% for 2024, marking the fourth consecutive year of losses and a steep 48% drop since its 2020 highs.
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="500" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204-1024x500.png" alt="" class="wp-image-607479" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204-1024x500.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204-768x375.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204-1536x750.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/10/22094138/image-204.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Sell Bonds, Buy Gold?</h3>
Veteran Wall Street investor Ed Yardeni, president at Yardeni Research, has been urging investors to &#8216;sell bonds, buy gold&#8217; since mid-August.
&#8220;Our Aug. 19, 2024 Morning Briefing was titled, ‘Get Ready to Short Bonds?'&#8221; Yardeni said in a note on Monday, citing the Fed's overly optimistic rate-cut expectations at the time.
&#8220;Bond investors may be expecting too many interest-rate cuts too soon,&#8221; he warned, predicting that yields would rebound sharply on stronger economic data.
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The expert&#8217;s view was right. The 10-year Treasury yield, which stood at 3.88% in mid-August, has surged to 4.18% on Oct. 21— a 56-basis-point jump.
In his April 7 report, Yardeni advised investors to &#8220;add to precious metals positions,&#8221; reiterating his long-standing view that gold remains a key investment hedge, especially as geopolitical risks rise.
His argument is simple: with bond markets vulnerable to rising yields and uncertainty over Fed policy, precious metals offer a safe haven for long-term investors.
<h3 class="wp-block-heading">Why Is Gold Rallying In 2024?</h3>
Gold has traditionally been viewed as a hedge against inflation, but its recent surge comes even as inflation has moderated. Yardeni points to rising geopolitical tensions, particularly in the wake of Russia&#8217;s invasion of Ukraine, and heightened economic uncertainty as major reasons for gold&#8217;s appeal. 
With Russia&#8217;s foreign reserves still frozen and global tensions on the rise, many nations are turning to gold as a secure store of value. 
This &#8220;de-dollarization&#8221; trend is likely another catalyst behind the metal&#8217;s sharp rise, as countries seek to diversify away from U.S.-denominated assets.
&#8220;Gold is now a hedge against U.S. economic sanctions,&#8221; Yardeni said, referring to moves by China and other nations to increase their gold reserves as a safeguard against potential asset freezes.
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