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Falling Yields and Surging Stocks

Hey, Ross here:

If you read the financial news, it’s chock full of talking heads wondering whether this rally has “faltered” or not.

So let’s look a little deeper under the hood at a big predictor of stock prices – the 10-year Treasury yield.

Chart of the Day

The 10-year Treasury yield has been steadily declining since peaking in late October – right before this rally started.

And now, it looks like it’s about to fall through a major support level (white line on chart).

We may see sub-4% yields very soon – which would be hugely positive for stocks.

Notice also that despite the rally pausing, yields are still going down.

If stocks keep pulling back – but yields keep trending down – this is a great sign of a pullback opportunity we can take advantage of.

Why is this the case? That’s what I explain in the Insight of the Day.

Insight of the Day

Yields are falling because traders are betting that central banks will cut rates sooner rather than later

Here’s a headline from Bloomberg that came out yesterday.

Essentially, bond traders believe that – despite all their bluster – central banks will cut rates sooner than expected.

That’s why they’re bidding up the price of bonds – and pushing yields down.

This is a great signal for stocks…

Because earlier this year, we’ve already seen how pauses in rate hikes can fuel strong rallies…

So imagine what would happen when we shift to rate cuts instead.

It would be like throwing gasoline on a fire.

As I’ve stressed over and over again, that’s why we need to get in position early – before the rest of the market does.

My target? The stocks that the big institutional buyers are quietly building positions in.

My strategy for spotting them? The one I developed while working in the heart of one of the biggest banks on Wall Street.

Click here to start using this strategy for yourself.

Embrace the surge,

Ross Givens
Editor, Stock Surge Daily

Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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