Spiking bond yields slam stock market winning streak

As it stated in The Dow's eight-session winning streak came to an abrupt end as Treasury yields spiked, returning to multi-year highs. Treasury yields surged higher after April retail sales came in as expected with a 0.3% month-over-month increase, but the March increase was revised higher to 0.8% from 0.6%, and core retail sales jumped 0.4%. The retail sales results prompted worries that inflation could pick up and force the Fed to raise rates faster than planned. The yield on the benchmark 10-year note ripped through the four-year high it hit three weeks ago, finishing 9 bps above yesterday's close at 3.08% for its highest close since July 2011, and the two-year yield gained 4 bps to 2.58%, its highest close since July 2008. The financial sector was helped by the rise in rates, settling near the top of the day's leaderboard but still closing with a 0.2% loss.

10-year Treasury yield spikes, spooking the stock market

Concerns about higher inflation caused an investor exodus from government bonds on Tuesday. Heavy selling drove the 10-year Treasury yield to 3.093%, the highest since July 2011. The 10-year yield helps determine how much it costs to borrow money, including mortgages, car loans and credit card rates. A rapid rise of Treasury rates in late January and February caught investors off guard, causing stocks to tank. Businesses are complaining about higher costs on everything from raw materials to trucking.

The latest stock market rally seems trustworthy, for now

as declared in The S&P 500 index is up some 4 percent in less than two weeks and is 6 percent above its early-April low. Those two earlier upside excursions stalled and the market slunk back toward the "down 10 percent from a record high" level. More important, the market's vital signs have returned to normal in this rally attempt. The Cboe Volatility Index (VIX) is below 13, a tame level that suggests a steadier tape, compared with 15 or higher during those earlier market bounces. The S&P 500 now trades at 16.5-times the consensus earnings forecast for the next 12 months, down from 18.6-times in late January.

Two of the supposedly safest stock market strategies are losing badly this year

The safest stock market strategies are losing the most money this year 6 Hours Ago | 01:12In a year where the market has been trying to find a direction, investors have been largely looking the wrong way. Two of the most crowded trades, betting on stocks with low volatility and ones with high dividend yield, have been major losers, according to Bank of America Merrill Lynch. An ETF that combines the two strategies, the $2.6 billion PowerShares S&P 500 High Dividend Low Volatility Portfolio, is down more than 6 percent year to date. Both strategies were considered safety plays after years of low interest rates and little volatility, but have suddenly turned dangerous. For high dividend, the biggest fund in the group, the $21 billion Vanguard High Dividend Yield Index Fund ETF Shares, is off nearly 2 percent year to date.

For stock market investors, there really is a great future in plastic

Plumb is the CEO of Madison, Wisc.-based SVA Plumb Financial, which runs about $2.7 billion mainly for institutional clients. Balanced funds tend to contain a mix of value-style stocks and bonds, and are marketed toward more conservative investors. When they were excited by the market, they were looking for competitive total returns in a good stock market."SVA Plumb Financial Thomas Plumb, CEO of SVA Plumb Financial. Plumb said the balanced fund's equity holdings are "about" 85% correlated with those of the Plumb Equity Fund, as the balanced fund is more diversified. Growth fundThe Plumb Equity Fund had 31 stock holdings as of March 31.

collected by :Molly Tony