Underneath the impressive market rally is a trend that doesn't seem quite right, according to J.P. Morgan.Marketsread more
Tesla is working on new battery cell designs, and a way to make their own cells, with R&D teams in a lab near its car plant in Fremont, California.Technologyread more
The Federal Reserve and the market are miles apart on interest rate expectations, and the disparity could cost the stock market a 7%-10% drop, economists say.Economyread more
JP Morgan's Jamie Dimon says student lending "is a disgrace and it's hurting America."Economyread more
Bitcoin topped the $13,000 level Wednesday, rallying to its highest price since January 2018.Bitcoinread more
Wayfair drew backlash and calls from some customers for a boycott after employees protested the company's apparent sale of $200,000 of mattresses and bunk beds destined for a...Retailread more
The president raised $6 million alone at a fundraiser he attended at the Trump International Hotel on Tuesday in Washington.Politicsread more
During the foreclosure crisis, investors transformed the single-family home rental market into a formally managed asset class. Now they want new homes.Real Estateread more
The first debates will give most of the contenders their biggest platform yet to present themselves to the American people.Politicsread more
The shutdown of the fire-damaged Philadelphia Energy Solutions refining complex could send gasoline prices higher across the U.S., but particularly in the mid-Atlantic region...Market Insiderread more
President Trump lambastes Twitter, Google and other technology giants for what he claims as their efforts to stifle him.US Economyread more
The jump in interest rates to four-year highs is the biggest catalyst behind the stock market's sell-off, and there are three big events that could send those rates even higher in the next 24 hours.
The first is President Donald Trump's State of the Union address Tuesday evening. Bond strategists say there are several risk factors associated with it.
One is that the president's plan to spend on infrastructure could end up increasing the national debt. The U.S. is already expected to double the size of its debt issuance this year, to nearly $1 trillion, and that is a factor that's been weighing on Treasury prices, which move opposite yields.
"It's $200 billion of actual spending, enhanced by private capital and municipal spending. Munis aren't really in a position to do that. It sounds better on paper than it is in practice," said George Goncalves, head of fixed income strategy at Nomura.
Trump, in the State of the Union, called on Congress to advance a $1.5 trillion plan to "rebuild our crumbling infrastructure," and federal appropriations should be leveraged by partnering with state and local governments and tapping the private sector.
Treasury yields slipped slightly after the speech, with the 10-year Treasury yield at 2.70 percent, down from Tuesday's 2.72 percent.Yields move opposite price.
The second event and the one strategists see as the biggest wild card, is the Treasury's refunding announcement, scheduled for 8:30 a.m. ET Wednesday. It will include details on the first-quarter Treasury auctions and possibly on other funding needs for 2018.
The government's bigger debt requirement is the result of more spending from the tax cuts and also an increase in entitlement spending. While usually a minor event, this week everyone in markets is watching the refunding announcement.
"That's huge. There's a lot of talk about that. We differ from the consensus so we think supply is at least going to pickup in the very long end, the 30-year bond. A lot of people think there will only be increases in the short end," said Michael Schumacher, director of rates at Wells Fargo.
John Briggs, NatWest Markets head of strategy, said he expects the auction size for 10-year notes and 30-year bonds to increase by $1 billion each, but any surprise could cause Treasury yields to move. He said the announcement should add supply across the curve, meaning an increase in Treasury bills at the short end all the way to the 30-year bond at at the long end.
The 10-year Treasury yield was at 2.72 percent in afternoon trading Tuesday, a big move from the 2.40 percent at the end of December. The 30-year was close to crossing the psychological 3 percent threshold.
When interest rates rise, they can become a challenge for stocks because they offer higher yielding investment alternatives and also make for higher borrowing costs for corporations. The closely watched benchmark 10-year Treasury yield impacts a whole range of borrowing rates from small business loans to home mortgages.
Goncalves said the government funding announcement will be important, particularly since it comes after the State of the Union focus on spending.
"Wednesday morning we may wake up and realize there's more debt coming down the road. Then we see the government estimates for its borrowing needs," he said. "That could be the one-two punch that brings us to near-term highs in rates for at least the week and maybe for the next month."
The final event is normally the one that would have the most potential to be market moving, but it is not expected to have much impact this week. The Federal Reserve meeting, underway Tuesday, concludes Wednesday and the Fed issues its statement at 2 p.m. ET.
While the central bank is not expected to raise rates at Fed Chair Janet Yellen's final meeting, it could indicate that the economy is improving and comment on inflation, which is running below its target.
But in the run-up to the meeting, the market is also beginning to expect a fourth rate hike for this year on top of the three the Fed is currently forecasting. If the statement sounds hawkish, that could pressure shorter-term rates, like the two-year. On Tuesday the two-year was at 2.12 percent.
"I feel like we have this crescendo moment if everything lines up like I suspect," said Goncalves.
There are other factors impacting bond yields this week, including Friday's jobs report, which could drive yields higher if wages rise more than expected.
"Technically, the charts show rates are stretched, and they're due for a pullback. We have month end which will coincide with the day after the president's speech," Goncalves said.