For now, bonds profits looking good enough

In the near-term, I think that the decline in U.S. bond yields should take a little pause.

They are now trading 2.5 standard deviations below their rolling 20 week moving average.

This will be mentioned in this week’s edition of my Macro Extremes newsletter.

In the April 19, 2024 edition of Macro Extremes, the U.S. 20 year bond yield appeared in the overbought extreme list and inversely, the iShares 20+ year treasury bond ETF (TLT) was in the oversold category.

The mid point for trading in the TLT around the last 2 weeks of April 2024 was ~ $88.46.

This week, the TLT is trading at 2.5 standard deviations above its 20 week moving average.

This week’s mid point price is $97.92.

Over the past 4 months……………that represents a capital return of 10.7% and when adding $1.22 per share of dividends received, the total return is a handsome 12%.

Who said bonds are boring.

Over the mid-term, I think bond yields will continue to fall.

August 8, 2024

by Rob Zdravevski

rob@karriasset.com.au