Bullish evidence from technical analysis and fundamental reasons suggest bonds are poised for gains as the economy slows and the Fed leans towards cuts. TLT is a good fund to position for the rally due to its position on the yield curve and high duration. The rally should surpass $100 and could reach $109 at the 2023 high.
Investors know the Federal Reserve WON'T cut rates when this week's policy meeting wraps up on Wednesday. But that doesn't mean the Great Rate Debate is settled.
Recent economic data supports a bullish view of long-term US bonds. The structural argument for high debt and deficit sustainability driving thesis. Introduction of a low-cost alternative to TLT - Schwab Long-Term U.S. Treasury ETF.
TORONTO, ON / ACCESSWIRE / June 10, 2024 / Theralase® Technologies Inc. ("Theralase®" or the "Company") (TSXV:TLT)(OTCQB:TLTFF), a clinical stage pharmaceutical company dedicated to the research and development of light and/or radiation activated small molecules for the safe and effective destruction of various cancers, bacteria and viruses, is pleased to announce that in preclinical research, it's lead compound, RuvidarTM, when combined with Bacillus Calmette-Guérin ("BCG"), was able to create a new compound with new synergistic characteristics. In cell-based experiments, the new compound, nicknamed RuBCG, was able to significantly increase the efficacy of BCG in cancer cell kill versus BCG or RuvidarTM alone, when non-light activated.
Long-term treasuries are attractive due to structural economic challenges and signs of inflation relief. Recent negative macro surprises have added fuel to the bull case, while the technical picture has improved. Factors such as declining real-time inflation, a decline in crude oil prices, and double relief from the Federal Reserve and US Treasury support a bullish view on long-term bonds.
Long-term treasuries have been under pressure, but there could be a softening trend in interest rates in the short term. The Federal Reserve scaling back its quantitative tightening program and the US Treasury's buyback program have not helped bond markets as expected. The US Government's large deficit and increasing debt levels are putting downward pressure on bonds, but interest rates need to come down for long-term debt sustainability.
The iShares 20+ Year Treasury Bond ETF (TLT) has come under pressure in the past few years as concerns about the US public debt have remained. Its stock has plunged by over 40% from its all-time high of $162.97 to the current $90.
The iShares 20+ Year Treasury Bond ETF (TLT) presents an opportunity for capital appreciation and monthly income. TLT has underperformed the market and carries the risks of opportunity cost and declining share prices. TLT's potential lies in a cutting cycle by the Fed, which could cause its underlying assets to become more valuable and push its share price higher.
Fed Trader's Chaim Siegel believes that the fundamentals of the market, including earnings and the economy, are good and that the market will continue to be bullish. He sees the Fed's stance on interest rates and inflation as key drivers for the market, and believes that as long as inflation remains around 0.3%, the market will be fine.