Investing in bonds’ – Trend Letter

Many investors ignore the bond market as it is not as ’sexy’ as the stock market. What most fail to understand is that the global bond market is much larger than the stock market, according to Standard & Poors, the global bond market is close to $123.5 trillion (2020 totals), with $46 trillion of that in the US. By comparison, the global stock market

To be a successful investor you need to follow the global flow of capital. If you want to understand what is happening in the markets and why, you need to know what is happening in the bond markets.

There are a few of ways to make money by investing in bonds:

Buy and hold bonds to maturity and collect interest payments, usually twice a year.
The second way is to is to profit by selling the bond at a price that’s higher than you paid for it
The third option, one that most aren’t aware of, is to use Exchange traded funds (ETF) which allow you to be long or short bonds. ETFs trade just like stocks, and you can buy or sell them with a click of your mouse.

We cover bonds, currencies, equities, commodities and precious metals in the Trend Letter, which is published for subscribers every Sunday afternoon.

Can the Treasury Really Defy Math? Why the ‘Bessent Put’ Is Playing a Dangerous Game

September 9, 2026/in Investing in bonds’, The Trend Letter, Trend Letter/by Trend Letter

Can the Treasury Really Defy Math? Why the ‘Bessent Put’ Is Playing a Dangerous Game

When US Treasury Secretary Scott Bessent moved to calm the world’s largest bond market with an expanded buyback program — announcing a maximum of $6 billion in purchases of longer-dated debt — the message was clear: the Treasury wanted to smooth volatility, ease rising yields, and show that official steps could prevent disorderly sell-offs.

(A buyback is when the Treasury repurchases some of its own previously issued bonds — essentially using new short-term borrowing to retire older debt and support liquidity.)

As the chart shows, the 10-year yield has been in a clean uptrend since bottoming near 3.9% back in March, and it was already pushing toward multi-year highs going into this week’s announcement. Instead of calming things down, the bond market largely shrugged. Yields moved higher — remember, yields and bond prices move in opposite directions, so rising yields mean bond prices are falling — and traders signaled that a $6 billion operation isn’t enough against the much larger flow of new debt the government must continually issue.

This raises a key question for investors and taxpayers: why is trying to manage long-term bond yields mainly through tactical buybacks a risky strategy?

$6 Billion vs. a $40 Trillion Problem

The US is running large deficits — around $2 trillion annually in recent years — and has a national debt that has passed the $40 trillion mark. Gross issuance is even larger, since short-term securities mature constantly and must be rolled over.

Against that volume, a $6 billion buyback ceiling is a rounding error: even a $6 billion operation works out to roughly 0.01% of the total debt outstanding. And this isn’t a one-time move — Treasury has said future operations will run ‘at least $4 billion’ going forward, meaning small, repeated doses rather than a single fix.

Buybacks can help clear older, harder-to-trade bonds from dealer inventories and support liquidity. They cannot change the underlying amount of new debt the market has to absorb. The Treasury is essentially removing a few older securities from circulation while continuing to bring far larger amounts of fresh supply to market behind it.

The Danger of the ‘Confidence Game’ (the so-called ‘Bessent Put’)

When officials intervene to influence market pricing, investors often start pricing in a ‘put’ — a reference to options trading, where a put option protects you if prices fall. Here, it means an informal market expectation that the government will keep stepping in to put a floor under bond prices and a ceiling on yields.

The trap: once markets believe the Treasury is defending a level, every rise in yields becomes a test of official resolve. If the next intervention falls short of expectations, it can trigger a sharper sell-off rather than calm — the opposite of what was intended.

History shows that defending specific prices against strong macro forces — heavy supply, inflation concerns, and so on — is difficult and often ends poorly.

Shifting Short-Term Pain into Longer-Term Vulnerability

To manage deficits or avoid locking in high long-term rates, governments can lean more heavily on short-term debt, like Treasury bills. This can work for a while, but it creates structural risk.

Short-term debt must be refinanced — or ‘rolled over’ — every few months. A 30-year bond locks in today’s rate for decades; a short-term bill doesn’t. If inflation rises, geopolitical tensions flare up, or capital flows shift, those rollover costs can jump almost immediately. Higher interest expense then crowds out other government spending and can worsen the fiscal picture down the road.

The Bottom Line

Bessent’s more activist approach may help during isolated liquidity squeezes and stop minor disruptions from snowballing. It cannot reverse the basic arithmetic of large ongoing deficits and heavy debt supply. Trying to ease yields mainly through tactical buybacks — without addressing the underlying fiscal imbalance — is a limited tool at best.

For retail investors, the takeaway is simple: official interventions can move short-term market psychology, but fundamentals — deficits, debt levels, inflation, and supply — still dominate over time. Don’t assume perpetual official support will keep yields low indefinitely. Focus on diversification, understand the interest-rate risk in your own portfolio, and keep an eye on the longer-term fiscal picture.

Eventually, the limits of tactical measures become visible.

Debt, bonds, gold, oil, bitcoin: it’s all connected this week

August 22, 2026/in Investing in bonds’, Investing in Commodities, Investing in currencies, Investing in gold, Investing in stocks, The Trend Letter/by Trend Letter

Market Pulse

The Week That Was — Aug 14–21, 2026

Hello Investors,

It’s all connected — and this week proved it again. Bonds, gold, oil, and bitcoin all moved on the same two storylines: Washington’s scramble to control borrowing costs, and Washington’s escalating economic war with Iran. Here’s what mattered.

Bond Yields: Treasury Blinks, Market Doesn’t Buy It

The 10-year hit 4.74% on Friday — a fresh 20-month high — even after the Treasury tried to talk yields down mid-week.
The 30-year Treasury yield hit 5.33% this week — its highest level in nearly 20 years, last seen in the summer of 2007, just before the financial crisis.
Treasury Secretary Bessent announced the department would double its long-bond buybacks to $4 billion next quarter, hoping to cap borrowing costs. It worked for about a day.
Fed Chair Kevin Warsh muddied the picture further, signaling a rate hike ‘may not be his preferred tool’ to fight inflation — leaving markets guessing ahead of Jackson Hole.
The number behind all of it: US national debt just hit a record $40,060,947,165,774. That works out to $116,507 for every citizen and $360,794 for every taxpayer — up a full trillion dollars in just five months.
Bottom line: at a 19-year high of 5.33%, the 30-year yield is tightening the screws on everyone who borrows money. Mortgage rates move higher, corporate borrowing gets more expensive, and the AI buildout — running on cheap debt — suddenly costs a lot more to finance. And a government $40 trillion in debt faces a crushing interest bill that already exceeds defence spending. Higher for longer isn’t just a Fed slogan anymore. It’s the new cost of doing business in America.

Gold: Best Week Since Mid-May

Gold broke above $4,600/oz on Friday, its highest level since mid-May, extending weekly gains to roughly 5%.
The trigger: growing alarm over US fiscal sustainability after national debt crossed the $40 trillion mark (see above) — the fastest single-trillion increase on record.
Central banks aren’t waiting around either — they bought a record 288.9 tonnes in Q2, up 62% year-over-year, buying into weakness, not strength.
Bottom line: every time Washington tries to manage its own debt problem, gold gets another bid. That dynamic isn’t going away.

Oil: Iran Tensions Ratchet Up Again

Brent settled the week at $94.39, WTI at $87.06 — Brent up 6.4% and WTI up 5.7% on the week, both touching their highest levels since late July.
The 60-day window for a US-Iran deal expired Monday with no resolution. Trump has since threatened sanctions on Iran’s trading partners and told his envoys to stand down from talks entirely.
The Strait of Hormuz remains effectively shut — a fraction of normal tanker traffic is getting through, and Iran says it won’t reopen the waterway until sanctions are lifted and ‘war reparations’ are paid.
The oil market’s problem is increasingly not simply access to crude, but the ability to turn that crude into diesel, gasoline and other products.
Consequently, refined fuels like diesel are driving broader inflation risks far more than crude prices alone imply..
Bottom line: this isn’t a spike-and-fade story anymore. The standoff is structural, and energy markets are pricing that in.

Bitcoin: Biggest Weekly Gain in Two Years

Bitcoin ripped roughly 20–22% this week, closing near $77,000 after starting the week around $62,800.
The rally lit up Wednesday, the moment Treasury yields pulled back on Bessent’s bond-buyback news — risk assets took the signal and ran.
Momentum built further on progress toward crypto market-structure legislation (the Clarity Act).
Bottom line: bitcoin traded this week like a high-beta bond proxy. When Washington moves on yields, crypto moves harder.

Canada-US Trade: Deal Collapses at the Midnight Deadline

Talks between Ottawa and Washington fell apart late Friday night, just minutes before a midnight deadline — triggering 50% tariffs on roughly $20 billion of Canadian goods, including hockey equipment, building materials, liquor, and clothing.
PM Mark Carney said Washington’s last-minute changes to agreed terms were ‘unfair, uneconomic,’ and called into question the reliability of any deal — and pulled Canada’s negotiators back to Ottawa.
The US side blames Canada for walking away from terms it says were already settled. Either way, Canada has vowed to match the tariffs dollar for dollar starting Sept. 8.
Energy, potash, and critical minerals were carved out of the new tariffs — worth watching for our uranium and rare-earth positions.
Bottom line: this is a fresh, direct hit to cross-border trade sentiment and adds another layer of uncertainty right as bonds, gold, and oil are already repricing risk. For Canadian investors, it’s one more reason hard assets and diversification matter right now.

The thread connecting it all: Washington is trying to manage a debt and inflation problem with one hand, running an open-ended economic war with Iran with the other, and now reigniting a trade fight with its closest neighbour. Gold and bitcoin are pricing the debt story. Oil and bonds are pricing the Iran story. Friday’s tariff news is a direct warning for Canadian investors. Companies that depend on US exports — manufacturers, lumber producers, auto parts suppliers, agricultural exporters — are directly in the crosshairs of new 50% tariffs.

Portfolio Spotlight: The Aug 5 Alert Is Already Paying Off

Trend Letter Open Portfolio: 21 positions, 17 positive, 4 negative, 60.24% average gain

Two weeks ago, we sent subscribers a BUY alert on three names built for exactly this environment — a debasement trade, a uranium supply story, and a geopolitical risk hedge — plus pointed new subscribers to a rare-earths position already sitting in our long-term model portfolio. Here’s how fast it’s already working:

Position

Rec. Date

Rec. Price

Current

Gain

Agnico Eagle Mines (AEM)

08/05/26

$224.85

$297.82

+32.45%

iShares Silver Bullion (2nd position)

08/05/26

$28.36

$31.75

+11.95%

Uranium Miners (2nd position)

08/05/26

$52.26

$58.19

+11.35%

We also flagged REMX (rare earths) to new subscribers that same week as a name already sitting in our long-term model portfolio. Since Aug 5, REMX has moved from $72.46 to $80.75 — a gain of +11.44% in the same two weeks.

Two weeks. Four names. Double-digit gains across the board — and gold’s biggest single mover, AEM, is already up over 32%.

This is exactly the kind of setup we build the Trend Letter portfolio around: when the macro backdrop turns — debt worries pushing gold, geopolitical risk pushing uranium and hard assets — we want you positioned before the move, not chasing it afterward.

And it’s not an isolated win. The full open portfolio is averaging a 60.24% gain across 21 active positions, with standouts like VanEck Junior Miners (+274%) and ProShares Ultra Long Gold (+176%) showing what staying with a multi-year thesis can do.

If you’re not already a Trend Letter subscriber, this is the kind of call you’re missing.

Subscribe for only $399.95

Talk soon,
Martin

Note: performance shown reflects Trend Letter model portfolio tracking as of Aug 22, 2026, and is not indicative of individual subscriber results. Past performance does not guarantee future returns.

The AI Boom Just Got a Bill in the Mail

July 29, 2026/in Investing in bonds’, Investing in stocks, The Trend Letter/by Trend Letter

The Fed didn’t hike rates this week. That was supposed to be the good news.

But while everyone was celebrating the Fed staying put, something more important was happening in the bond market — and it’s the real reason tech stocks got hammered.

Here’s the simple version: long-term interest rates are climbing, and that’s a problem for AI.

Why This Matters to You

The AI trade has long been fixated on demand indicators, viewing massive capital expenditure as validation of the boom. However, market attention ignored a critical follow-up: Who ultimately funds these capital investments, and what is the cost of capital behind them? That question just got a lot more expensive to ignore. While short-term rates held steady, the 30-year Treasury yield pushed back toward levels we haven’t seen in almost 20 years. Oil prices climbing, inflation fears creeping back in — the bond market did what the Fed wouldn’t.

Translation: even though the Fed held rates flat, borrowing got more expensive anyway.

US 30-Year Treasury Yield — back above 5.2%, its highest level in nearly two decades, even as the Fed held its overnight rate steady.

Why AI Companies Care So Much About This

Meta just told investors it plans to spend up to $145 billion in 2026 building AI infrastructure. That’s not pocket change — and it’s not all cash sitting in the bank. A lot of this buildout is financed: debt, leases, credit from suppliers.

It’s a good story until the interest bill shows up.

The Spark: Korea

The selling actually started in Korea. SK Hynix — a major chipmaker — put up genuinely strong results. In a normal market, that’s a ‘buy the dip’ headline.

Not this time. Revenue came in just a touch below sky-high expectations, and the reaction was brutal. It didn’t stay contained to one stock, either — the entire KOSPI index rolled over, sliding out of its uptrend and into a clean downtrend that’s still running.

The lesson: when a stock — or a whole market — is priced for perfection, ‘very good’ isn’t good enough anymore.

KOSPI Index — Korea’s benchmark rolled out of its uptrend and into a falling channel the same week SK Hynix’s results disappointed, spreading the selloff well beyond a single stock.

That selling spread fast — into chips, into AI-adjacent names, into the broader market globally.

SOXX Semiconductor ETF — the clean uptrend (green channel) broke the same week Korea’s chip selloff hit, and price has been sliding in a new downtrend (red channel) ever since.

And here’s the catch-22: the more confident these companies get about AI demand, the more they spend to keep up — which means the more they need to borrow — which means the more exposed they are when borrowing costs rise.

What Changes From Here

This doesn’t mean the AI trade is over. It means the market is about to get pickier.

Going forward, expect investors to start separating AI winners into two camps:

Companies already turning AI demand into real cash flow — these should hold up.
Companies still burning cash building for a future that hasn’t arrived yet — these get judged much more harshly.

Cheap chips and big spending numbers won’t automatically justify sky-high valuations anymore. The market wants to know the financing terms, not just the growth story.

Bottom line: The AI trade isn’t broken. But the free pass on ‘spend now, profit later’ is over. From here, it’s not just about how big the story is — it’s about who can actually afford to build it.

$US banknotes falling with crowd silhouette in background, symbolizing wealth, money, success, and financial growth.

Inflation’s Hidden Impact: What Investors Need to Know Now

November 15, 2025/in Investing in bonds’, The Trend Letter/by Trend Letter

During the COVID-19 pandemic, inflation surged due to multiple factors. Governments worldwide shut down supply chains, drastically limiting the supply of goods. With fewer goods available and more buyers, prices rose. At the same time, massive government stimulus inflows, with the US alone distributing about $5 trillion, fueled demand further, accelerating inflation.

Central banks also played a role by injecting liquidity through bond-buying programs. The Federal Reserve pumped $4.7 trillion into the economy purchasing Treasuries and Mortgage-Backed Securities. This increased liquidity lowered real interest rates, which is inflationary. Initially, central banks responded slowly to rising inflation. Federal Reserve Chair Jerome Powell characterized early inflation as ‘transitory,’ a position now widely reevaluated, as inflation remains elevated four years later.

Politicians like to claim inflation is ‘down,’ but that’s misleading. Inflation measures the rate at which prices rise—not the prices themselves. If inflation is 6% one year and 3% the next, prices don’t fall; they’re now 9% higher over those two years. The pace of increase may slow, but the price level remains permanently higher.

Key current drivers of inflation include government spending and debt growth. The US is adding about $2 trillion annually to its debt. Canada recently announced a record $78 billion deficit. In the US, the cost of servicing the debt has surged – from $32 billion in 1970 to over $1.16 trillion today. The total US debt surpassed $38 trillion, equating to roughly $111,000 per citizen and $328,000 per taxpayer.

This rising debt burden lowers the purchasing power of the currency, pushing up goods and service costs. President Trump calls for Fed rate cuts to reduce interest payments, but Powell resists because inflation officially remains above 3%, and anyone shopping for groceries knows that real inflation is much higher.

If rate cuts happen under a new Trump-appointed Fed Chair, economic conditions differ from previous easing cycles. Then, the Fed cut rates during weak economic growth and low inflation. Today, the economy is quite strong, inflation is persistent, and unemployment, although rising, is low. This is not an ideal setting for major stimulus.

Persistent inflation and surging government debt strain the bond market. Inflation erodes the value of fixed payments, pushing investors to demand higher yields and driving bond prices lower. Large deficits require more bond issuance, raising borrowing costs and term premiums as fiscal worries grow. Together, rising inflation, heavy debt, and a ‘dovish’ Fed will increase bond-market volatility, making bonds less reliable safe havens.

In this environment, investors who fail to adapt may pay the highest price.

Stay tuned.

‘The Art of the Deal: $2,000 Cheques & 50‑Year Mortgages’

November 11, 2025/in Investing in bonds’, The Trend Letter/by Trend Letter

President Donald Trump has proposed two attention-grabbing economic ideas: $2,000 stimulus cheques for Americans and 50‑year mortgages to make homeownership ‘affordable.’ Both aim to ease financial pressure, but a closer look reveals serious pitfalls and potential political maneuvering.

The $2,000 Cheques

Trump has long pushed for $2,000 cheques, arguing that previous $600 payments were insufficient. His current proposal frames them as a broad ‘dividend’ from tariffs, targeting most Americans outside high-income brackets.

Appeal:

Immediate relief: cash in households’ pockets.
Populist messaging: positions Trump as a champion of working-class voters.

Concerns:

Inflation: Adding cash into a tight economy could worsen price pressures.
Funding uncertainty: Using tariff revenue is legally complex, and the plan could face court challenges.
Political optics: With tariffs now heading to the Supreme Court, Trump could blame the Court if stimulus cheques fail, turning a policy setback into a political talking point.

While the checks may provide short-term relief, they risk economic consequences and political theatrics over substance.

The 50-Year Mortgage

Trump’s 50-year mortgage idea aims to lower monthly payments, but the long-term costs are staggering.

Example: $500,000 home, 20% down ($100,000), 6% interest:

Term	Monthly Payment	Total Interest
30 years	$2,398	~$463,000
50 years	$1,998	>$900,000

While monthly payments fall, the borrower pays nearly double in interest and may never fully own the home without extra principal payments.

Other risks:

Slow equity growth, leaving homeowners tied to decades of debt.
Regulatory hurdles: Federal rules and Fannie/Freddie limits make 50-year loans legally complicated.
Market distortions: Easier access may push home prices higher rather than improve affordability.

The policy trades short-term comfort for long-term financial strain, creating the risk of perpetual debt.

The Big Picture

Together, these proposals target symptoms rather than root causes. Cash cheques may ease spending temporarily, and ultra-long mortgages reduce monthly burdens, but neither addresses wage stagnation, supply-side constraints, or structural inflation pressures.

Politically, they also offer flexibility: if the Supreme Court blocks the tariff-based funding, Trump can portray the setback as judicial obstruction, deflecting responsibility. Economically, however, Americans could face higher debt loads, slower wealth accumulation, and inflated housing costs.

Bottom Line

Trump’s stimulus vision is flashy but flawed. $2,000 cheques offer short-term relief with legal and inflation risks; 50-year mortgages lower monthly payments but saddle homeowners with enormous long-term interest costs. What appears to be affordability may hide extended debt, financial vulnerability, and a political narrative ready to blame the courts for any failures.

As investors, these proposals would certainly be bullish for gold, silver, and bitcoin as hedges for more inflation.

Up-to-date market trend analysis and financial insights from DataMine Quest’s Trend Letter for informed investment decisions.

When Governments Forget Who They Serve

July 7, 2025/in Investing in bonds’, Investing in currencies, The Trend Letter, Trend Letter/by Trend Letter

Civilizations rarely collapse in a single moment -they erode gradually, often in full view. One of the most telling signs? People leaving. Not for better weather, but for better opportunity, greater freedom, and fiscal sanity.

Time and again, excessive taxation, bloated bureaucracy, and anti-productivity policies have pushed citizens to vote with their feet. When governments punish innovation and reward dependency, they chip away at the engines of growth: entrepreneurship, self-reliance, and personal responsibility.

No state can sustainably support its people by consuming more than it creates. When incentives shift from contribution to entitlement, stagnation takes root—and resentment between the taxed and the subsidized grows.

This isn’t theory. It’s history. And the pattern is clear: when governments prioritize control over service, decline isn’t just possible—it’s inevitable. The signs are all around us. The only question is: will we listen, or repeat the cycle once again?

Cheers!

Martin

A detailed stock market heatmap illustrating sector performances, with red indicating declines across technology, consumer electronics, healthcare, financials, and more, highlighting key companies like MSFT, AAPL, AMZN, TSLA, and GOOGL.

Markets Slide as Political Turmoil Erodes Confidence

April 22, 2025/in Investing in bonds’, Investing in gold, Investing in stocks, The Trend Letter, Trend Letter/by Trend Letter

Global equities tumbled Monday, driven by political instability, policy uncertainty, and rising trade tensions. Trump’s threat to fire Fed Chair Jerome Powell further undermined confidence in the Fed’s independence and the broader US financial system.

The S&P 500 heatmap was a sea of red, with Netflix a rare bright spot. Major tech names led the decline: Tesla (-5.75%), Nvidia (-4.51%), Salesforce (-4.45%), and Meta (-3.51%).

S&P 500 Technical Analysis

For the S&P 500, initial resistance is at 5,500 (lower red horizontal line); a break above that opens the door to 5,700 (upper red horizontal line). Support sits just under 5,000 (upper green horizontal line), with 4,800 (lower green horizontal line) as a key weekly level to watch.

Any positive trade deal headlines could spark a bounce this week, but further US–China escalation would cap upside potential. The longer uncertainty lingers, the greater the damage to the global economy, and declining business and consumer confidence is a long-term drag on equities.

For short-term traders, a dip to 5000 could trigger a bounce, but any rebound is likely capped at 5400.

Bond Yields Rising

Yields jumped on inflation fears, declining foreign demand, and policy chaos:

Tariff Shock: Trump’s April 2 tariffs first triggered recession fears, then inflation worries—pushing yields higher.
Foreign Selling: China and Japan cut Treasury purchases, while weak auctions and hedge fund deleveraging sent the 10-year yield to 4.5% intraday (April 8). Many allies, frustrated with Trump, see little reason to back U.S. debt.
Economic Risk: Higher yields threaten U.S. debt servicing ($37T) and consumer borrowing, deepening financial stress.

Flight to Safety

Gold hit a fresh all-time high at $3,422, now up 31% year-to-date, on pace for its best annual gain since 1979. Though technically overbought, it remains the go-to safe-haven. Trade war fears are driving investors, hedge funds, and central banks to unload US assets and pile into gold.

The primary retail buyers are in Asia.

Looking back to gold’s 2011 high, we see it trading within two parallel channels. The last time we saw intersecting channel, it marked a major low in late 2022 (lower white circle).

With the lines crossing again near current levels (upper white circle), this could signal a potential short-term top. A meaningful pullback from here could present a solid buying opportunity.

Bitcoin Rallies as Dollar Slides

Bitcoin posted its strongest day in weeks, fueled by a combination of macro pressures and renewed institutional interest. Confidence in traditional assets took a hit as Trump’s attacks on the Federal Reserve and its leadership weakened the US dollar, driving investors toward Bitcoin as a hedge. Meanwhile, institutional demand picked up, highlighted by Japan’s Metaplanet buying 330 additional BTC and strong inflows into US Bitcoin ETFs.

Bitcoin is now testing initial resistance at $88.3K, with major resistance at $92.5K – the same level that served as strong support from November through December.

Keep your head on a swivel – this is far from over!

Stay tuned!

Martin

AAPL stock chart from Trend Letter highlighting Apple's +4.06% growth, part of the technology sector on the stock market.

Markets Rally, Bonds Break, Gold Soars—What You Need to Know

April 11, 2025/in Investing in bonds’, Investing in gold, Investing in stocks, The Trend Letter/by Trend Letter

Markets End Volatile Week with a Strong Rebound – April 11, 2025

Markets capped a wild week with a strong finish, shrugging off trade war shocks and riding a wave of optimism:

Stocks Bounce Back: After days of volatility, the Dow surged 600 points (+1.6%), the S&P 500 climbed 1.8%—its best week since October 2023—and the Nasdaq jumped 2.1%, led by a tech resurgence.
Trade War Tensions: Markets were rattled by China’s retaliatory tariffs of up to 125% and President Trump’s aggressive 145% hikes on Chinese imports. Yet, solid bank earnings and cooling inflation helped restore investor confidence.
Flight to Safety: Gold soared to a record high as a safe-haven play, while 10-year Treasury yields surged to 4.53%, approaching multi-decade highs.
Tech Leads Recovery: Mega-cap tech stocks including Nvidia, Microsoft, and Tesla staged a strong rebound after Thursday’s sharp selloff.

Despite intense geopolitical and market pressure, Wall Street closed the week with notable strength, showing surprising resilience. The S&P 500’s performance for the week ending, was its strongest since November 2023. Here is today’s heat map:

How 145% Tariffs on Chinese Imports Could Shock U.S. Consumers

With over 70% of key consumer goods like smartphones, furniture, and video games sourced from China, tariffs could trigger sharp price hikes across everyday essentials.

Bond Market Flashing Red: Why Yields Are Surging Despite Stock Market Weakness

There’s a notable shift in Trump’s focus this term compared to his first. Back then, he constantly cited the stock market as proof of a strong economy. This time, he’s barely mentioned it.

Instead, the emphasis is on policy—tax cuts, deregulation, spending restraint—and notably, lower borrowing costs. His Treasury Secretary, Scott Bessent, a former hedge fund manager, has made it clear: the goal is to bring down the 10-year Treasury yield.

But the market isn’t cooperating.

The 10-year yield, which dipped to 3.7% on April 4, has surged to nearly 4.5%—an 80 basis point jump in just one week. That’s the opposite of what Trump and Bessent want. Rising yields suggest the bond market expects higher inflation, even as economic growth slows—a recipe for stagflation.

Stagflation puts the Fed in a tough spot. Cutting rates could fuel inflation, but rising yields make borrowing more expensive for consumers, businesses, and the government.

So why are bonds selling off while stocks are falling? Isn’t the bond market supposed to be a safe haven?

The first part of the answer answer lies in the scale of US borrowing. The government needs to issue $7–8 trillion in new debt this year to fund ongoing deficits and refinance maturing debt. With annual deficits exceeding $2 trillion and total debt above $37 trillion, supply is overwhelming demand.

Layer in the geopolitical angle: the US and China are in a full-blown trade war. China—America’s second-largest foreign bondholder—has leverage. If China were to start selling US Treasuries while the US is issuing trillions more, bond prices would plunge and yields would spike.

Plus, many US allies aren’t exactly eager to support bond auctions while facing tariffs of their own. Why help fund a government that’s targeting your economy?

If yields continue climbing toward 5% or higher, it could spell serious trouble for the US economy—and likely drag the stock market down with it.

Gold Surges to New Highs as Safe Haven Demand Soars

Gold is ripping higher—up $70 today to a fresh all-time high of $3,250.

Just last week, it dipped to $2,970 during a broad market panic that triggered liquidation across all assets—gold included. It was a classic case of the baby getting thrown out with the bathwater. But that selloff didn’t last. Investors quickly stepped back and asked: What are the real safe haven plays right now?

Treasuries? The yen? Neither offer the confidence they once did. Bitcoin has been trading more like a tech stock than a store of value. That leaves gold—and it’s showing why it still holds safe-haven status.

Notably, gold doesn’t look like a crowded trade. COT data last Friday showed net-long positions at year-over-year lows, a bullish contrarian signal.

Yes, gold is expensive relative to other assets:

The gold/oil ratio is at 53:1 (vs. a historical average of ~20:1).
The gold/silver ratio has ballooned to 103:1 (vs. a long-term norm around 50–60:1).

But these extreme ratios reflect deep global uncertainty. The West’s seizure of Russian reserves and removal from SWIFT showed that financial infrastructure can be weaponized. That sent a clear message to countries like China, Russia, and Iran: don’t trust the West—buy gold.

Add in today’s escalating trade wars and rising geopolitical risk, and it’s no surprise that central banks are aggressively adding to their gold reserves. Retail investors are following suit, looking for a hedge amid global turmoil.

Key levels to watch:

Resistance: $3,300
Initial support: $3,050
Major support: $2,960 (last week’s low)

For now, gold remains in a strong uptrend. It may pause or consolidate, but there’s little to support a bear case in the near term.

Stay tuned!

AI-driven stock market data visualization with futuristic cityscape and dynamic analytics graphics for today's trending charts.

Trump’s Victory Fuels Market Frenzy: Today’s Charts

November 6, 2024/in Investing in bonds’, Investing in currencies, Investing in gold, Investing in stocks, The Trend Letter/by Trend Letter

The S&P 500 soars: The stock market skyrocketed with Trump’s victory and the Republicans securing the Senate and poised to claim the House.

Bitcoin soars to new high: Bitcoin surged past $75,000, driven by Trump’s pledge to establish the US as a leading crypto hub. This rally reflects heightened investor optimism around a potential crypto-friendly regulatory environment under the new administration.

US Dollar blasts higher: The dollar marked its strongest day since 2022 on a strong stock market and rising yields.

Bank stocks rally: Bank stocks soared as investors anticipated deregulation and economic growth under the new administration. Major institutions saw substantial gains, with JPMorgan Chase leading the way, up 13% today.

Gold falls: With a huge rally in the US dollar, gold got clobbered, down 73.00 for the day.

Bond market turmoil: While Trump’s policies are welcomed by the stock market, the bond market is reacting less favorably. Expectations of lower tax revenues and higher government spending point to rising deficits and ballooning debt. As inflation expectations climb, the value of fixed-income investments erodes, pushing investors to demand higher yields, which drives bond prices down. This dynamic reflects concerns over inflation and fiscal imbalances under the new administration.

Green stocks get hammered: Companies in the green energy sector saw sharp declines, with solar stocks such as Sunnova Energy plummeting—Sunnova dropped a staggering 51% today. This sell-off underscores investor concerns about reduced environmental policy support under Trump’s administration, casting uncertainty over the future of renewable energy initiatives.

Market insights: This political landscape gives Trump significant leeway to implement his pro-business agenda—lower taxes and reduced regulations—which investors see as fuel for market growth and economic expansion. The rally reflects Wall Street’s optimism about a policy environment favoring corporate earnings and business-friendly reforms.

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This Week’s Key Market Highlights:

October 26, 2024/in Investing in bonds’, Investing in Commodities, Investing in currencies, Investing in gold, Investing in stocks, The Trend Letter/by Trend Letter

October 25, 2024:

The S&P 500 dip: The first weekly decline after six gains suggests a potential bounce next week, though election volatility could bring market jitters, especially if results are delayed.

US Election Countdown: With just 10 days until the election, markets leaning toward a Trump victory due to his pro-deregulation stance, seen as favorable for business.

Rising Bond Yields: Concerns about persistent inflation are pushing bond yields higher, limiting room for Fed rate cuts. The Bank of Canada cut rates by 50 bps to 3.75%, and the ECB by 25 bps to 3.4%, contrasting with the Fed’s 5%.

Rising Mortgage Rates: Contrary to expectations, mortgage rates are rising, tracking higher bond yields despite the Fed’s September rate cut.

US Dollar Surge: Up 4% since late September, the dollar’s strength reflects robust US economic data, solidifying it as the “least ugly” currency in uncertain times.

Canadian Dollar Weakness: As the Bank of Canada cuts more aggressively, the loonie falters amid Canada’s weaker economic outlook.

Homebuilder Setbacks: Rising mortgage rates weigh on homebuilder stocks.

Gold Near Highs: Gold is nearing new highs with its RSI around 70 (bottom of chart), signaling potential overbought conditions and a possible pullback.

Market Insights: Bullish trends continue, but election uncertainty looms. A clear election outcome may trigger a ‘sell the fact’ reaction.

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