Market Morning: Biggest Bond Blowup Since 1991

Market Morning

Biggest Single-Day Bond Rout in 28 Years Strikes Fear Throughout the Markets

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In the greatest single-day Treasury rout in nearly 28 years since January 16th 1991 when President George H.W. Bush announced the start of the first Gulf War, 10Y bond yields (^TNX) have skyrocketed nearly 20 basis points in 24 hours, from a low of 3.04% in October 3rd to just below a high of 3.24% today. Yields are at 6 year highs, confirming what is now the longest stretch of generally rising yields, now 10 years long, since a long term bond bull market began way back in 1981. Is the bond bull market finally over? This wouldn’t be too great for the Federal government’s finances, given that the national debt is over $21.6 trillion now. The move in yields over the last 24 hours puts, very roughly, the costs of servicing the national debt up somewhere in the ballpark of $4.32 billion annually. The national debt is serviced by selling more debt, which is then serviced by selling more debt and so on. S&P futures (NYSEARCA:SPY) are down 0.6% this morning, and the Nasdaq (NASDAQ:QQQ) is down close to 0.8%. Not horrible yet, but let’s see how this develops.

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In Better News, Toyota and Softbank Unite on Driverless Tech Services

Toyota (NYSE:TM) and Softbank (OTCMKTS:SFTBY), a Japanese tech giant, will be uniting on driverless tech services like hospital shuttles and such, in a vision of the world where fewer and fewer people drive their own cars. Which raises the question, what would police car chases be like and who would actually be controlling them? In any case, this joint venture follows a partnership announced yesterday between Honda (NYSE:HMC) and General Motors (NYSE:GM) where the latter has taken a 5.7% stake in the former’s self-driving vehicle unit. The joint venture between Toyota and Softbank will have an initial capital pool of 2 billion yen, with each owning half the venture. It will be called MONET for Mobile Network, no relation to the French impressionist artist Claude Monet, though he may have appreciated the coincidence.

30 Cryptocurrency ATMs coming to Argentina

In the midst of a currency crisis, is cryptocurrency coming to the rescue in inflation-torn Argentina? Possible, as 30 cryptocurrency ATMs that consumers can use to buy and sell Bitcoin (BTC-USD) may be on the way to the country. The automatic teller machines will be provided by Athena Bitcoin, where Greek goddesses and virtual currencies unite. The Bitcoin ATM company has already installed its first machine in a mall in Buenos Aires. Another Bitcoin ATM company, Odyssey Group, where this time ancient Greek epic poetry and cryptocurrency collide, wants to install 150 machines by the end of the year as well.

British PM May Attempting to Rush Brexit Deal Through Parliament

It could get dicey in the United Kingdom through the rest of the year. British Prime Minister Theresa May is trying to rush her Brexit deal through Parliament within 2 weeks of any deal being signed with Brussels. That will, of course, give parliament only 2 weeks to scrutinize any deal signed, and this is sure to cause a rage within her own party, the rebels of which consider May’s preferred deal to be BINO – Brexit in Name Only, leaving most of the practical implications of European Union membership in full force.

Amazon Raises Wages, But Advocates Government Force Wages Higher For Competitors, Too

Amazon (NASDAQ:AMZN) is being heaped with lavish praise for raising its own minimum wage to $15 an hour, but has cut other benefits to employees like stock options and pay incentives for other employees in order to balance the books. Further, the retail giant has indicated that it will be advocating for a rise in the federal minimum wage, in a move that looks like it is trying to harm competitors by forcing them to pay higher wages to their own employees as well.


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