2 hours ago
Look for opportunities when the 10-year yield reaches 5%
Traders are watching the 10-year Treasury yield closely to see if it finally hits 5% – a first since 2007 – but astute investors with a long-term perspective could find some solid bargains if they know where to look.
First, investors who have parked their fixed income portfolios in cash and short-term government bonds may find an opportunity to extend duration. Duration is a measure of a bond’s price sensitivity to changes in interest rates, and longer-term bonds have longer duration.
“You don’t have to rely on 15 or 20 years when it comes to duration,” said Shannon Saccocia, chief investment officer of NB Private Wealth. “You can plan for a longer period of time – four or five years – and start locking in returns that are very attractive in the short term, but also quite attractive over the longer term.”
Investors could buy these longer-dated issues over the next few months, gradually extending the maturity, she said.
By extending duration, investors avoid the problem of reinvestment risk, meaning they lack the opportunity to earn competitive returns when their short-term fixed income investments mature.
Read here to learn more options in a higher-rate world.
– Darla Mercado
2 hours ago
The uptrend among retail investors is below average for the fifth week out of six
Individual investor optimism about the outlook for stocks over the next six months fell to 34.1% in the American Association of Individual Investors survey this week, down from 40.0% last week, and the fifth week of six in which optimism was below the long-term optimism historical average of 37.5%.
Also in the last week, the bear market fell to 34.6% from 36.5% last week, but is still above the long-term historical average of 31.0%.
Those neutral on the stock outlook rose from 23.5% to 31.3%, close to the historical average of 31.5%.
– Scott Schnipper
2 hours ago
These are the stocks that are seeing the biggest moves in the after-hours session
Check out the companies making headlines in after-hours trading.
- SolarEdge – Shares plunged 20% after the solar company cut its third-quarter revenue forecast to $720 million to $730 million, down from its previous forecast of $880 million to $920 million. CEO Zvi Lando said the company experienced “significant unexpected” cancellations and postponements of existing backlogs at its European distributors. Enphase Energy and First Solar fell 14% and 4.9%, respectively, on the bad news from SolarEdge.
- Intuitive Surgical – Shares fell 7% after Intuitive Surgical missed third-quarter revenue expectations, posting $1.74 billion, while analysts had forecast $1.77 billion, according to LSEG, formerly known as Refinitiv. The company reported adjusted earnings per share of $1.46, beating analysts’ expectations of $1.41 per share.
- CSX – Shares of the transportation company fell about 1% after the company’s third-quarter earnings fell short of analysts’ estimates. CSX reported profit of 42 cents per share, while analysts polled by LSEG called for 43 cents per share. Revenue came in above expectations at $3.57 billion, while analysts forecast $3.55 billion.
The full list can be found here.
—Pia Singh
3 hours ago