On August 2, 2017

Charts that matter

By Kevin Theissen

In early July, Financial Times (FT) published a story titled “Five markets charts that matter for investors.” Among the issues addressed in the charts were the bond market bear watch. The yield on 10-year German Bunds (Germany’s government bonds) reached an 18-month high of 0.58 percent recently. Yields rose after the European Central Bank’s Mario Draghi indicated its stimulus efforts would end at some point.

When bond yields rise, bond values fall, and that makes rising interest rates quite a significant event for anyone who holds lower yielding bonds. In the United States, ten-year U.S. Treasuries moved to a seven-week high last week and then dipped lower following the release of the Federal Open Market Committee meeting minutes, reported CNBC.com.

Another report is on the financial companies gaining favor. During the past month, U.S. stock markets have seen a sector rotation. FT reported: “…S&P financials have gained some 6 percent, with tech sliding almost 4 percent. That still leaves financials lagging behind the S&P 500 for the year and well behind the roughly 17 percent gain for tech. A similar story has unfolded in Europe between banks and tech.”

Investors’ appetite for financial companies may reflect the belief higher interest rates are ahead. Banks and other financial firms generally benefit when interest rates rise. Investor’s Business Daily reported:

“Several Wall Street giants have warned of weak trading revenue in Q2, continuing the lackluster trend in 2017…Still, bank stocks large and small have been leading in recent weeks, helped by higher bond yields and massive buyback and dividend plans.”

With regards to the labor market: In early in July, the unemployment rate in the United States rose from 4.3 to 4.4 percent. It was good news according to an expert cited by Barron’s, “…the rise in labor force participation indicates slack remains in the labor market.” That may be the reason wages showed little improvement.

Kevin Theissen is principal and financial advisor at Skygate Financial Group, LLC., located on Main Street in Ludlow. He can be reached at [email protected].

Do you want to submit feedback to the editor?

Send Us An Email!

Related Posts

 What’s in a name?

June 25, 2025
There’s nothing like a talk show to spark an idea for a column. Hosts Kelly Ripa and her husband, Mark Consuelos, recently discussed how people’s first names often serve as clues to the decade in which they were born. Some names that are rarely chosen today were popular in previous decades.  The given name that…

No patch left unskied

June 25, 2025
I’m calling it.   I drove around the long way, hoping to catch one last glimpse of the patch before we actually began hiking up into The Canyon. Partly because I wanted to see what I was getting into and partly because I wanted to make sure she was still there. I honestly wasn’t sure…

Pack up your troubles

June 25, 2025
The longest day of the year has officially come and gone, which means we are now on the slow, downhill slide toward winter.  Given that the days are currently long and the temperatures are nearing their peak, my family has opted for the traditional summer beach vacation. This is nothing new since we’ve rented a…

Life in a shell: eastern box turtle

June 25, 2025
As a budding naturalist growing up in the concrete-heavy environs of Boston, I would regularly thumb through my family’s collection of nature books and daydream about the creatures within. One species I was particularly drawn to was the eastern box turtle. These charismatic terrestrial turtles have high-domed shells festooned with colorful yellow or orange markings…