Stutland Equities will now have some national exposure as CNBC has announced a new show called "Options Action". The show will be hosted by Melissa Lee with a panel of four experts which includes yours truly. The show will be fast-paced round table discussion. I hope to provide some insight on how to profit from the news of the week using options. The show will start on January 16 and air at 11:30pm EST. on Friday Nights and will repeat on Saturday and Sunday mornings at 6:00am EST. Stay tuned for more details.
One of the questions I get most from clients is how to generate yield when the Fed is on hold with rates at zero. For a while many defensive clients were content receiving their 3% annual yield from Treasury bonds, but the Fed’s most recent meeting minutes shows that the Fed’s pace of bond buying may soon slow. While I do not think tapering is likely before year end (unless economic data accelerates significantly) the bond market is forward looking and already beginning to price tapering in. Smaller Fed purchases of Treasury bonds will mean that bond yields go up and bond prices go down. Bonds have been in a multi-year bull market, and we may now be on the cusp of a multi-year bear market. The most important indicator to watch is the 10-year yield, which cracked the 2.10% level this week for the first time in a year. If we continue to hold above 2.05% in June, the top is likely in for bonds and borrowing rates will be on the rise for everyone, including the US Treasury. So, how am ...
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