During a period when long-term interest rates are rising quickly, you will see headlines that bonds are performing poorly, because their market values must decline as interest rates go up. But long-term investors who hold bonds for income may have a different opinion: If bond issuers are making their interest payments, the bonds are performing well. Still, it isn\u2019t fun to watch your market value and your portfolio balance decline.<\/p>\n
MarketWatch readers reacted in droves to Aarthi Swaminathan\u2019s coverage of the mortgage-lending market. She interviewed economists who believe U.S. mortgage loan rates might climb to 8%, which no longer seems to be a stretch, with Freddie Mac saying the national average rate for a 30-year loan was 7.09% as of Thursday. For 15-year mortgage loans, the average rate was 6.56%, according to Freddie.<\/p>\n
Vivien Lou Chen looks into the reasons why the yield on 10-year U.S. Treasury notes jumped to 4.31% on Thursday, the highest level since November 2007, while also explaining how the Treasury Inflation Protected Securities (TIPS) market shows how much higher investors expect the \u201creal\u201d cost of borrowing \u2014 interest rates minus the inflation rate \u2014 to get. <\/p>\n
One factor sending bond prices lower \u2014 and rates higher \u2014 was the release on Wednesday of the minutes of the Federal Open Market Committee\u2019s July 25-26 meeting. Most participants in the Fed policy meeting \u201ccontinue to see significant upside risks to inflation, which could require further tightening of monetary policy,\u201d according to the minutes.<\/p>\n
Market Extra: <\/strong>How higher-for-longer rates are playing out as 10-year yield hits 15-year high <\/p>\n Early on Friday, the yield on 10-year Treasury notes Joy Wilthermuth interviews Ryan Murphy, director of fixed-income business development at\u00a0Capital Group, who explains why bond investors should wait while getting paid their interest and \u201cknow this is going to work out in the end.\u201d <\/p>\n From the daily Need to Know column:<\/strong> Bond yields hold the key to an emotional market that can change on a dime, says this strategist<\/p>\n A gloomy look ahead to 2025:<\/strong> Risky bonds are facing a \u2018maturity wall\u2019 that could sow more panic in markets<\/p>\n <\/p>\n With mortgage loan rates at their highest level in 21 years, homeowners are reluctant to sell if they locked in low interest rates before March 2022, so builders have been ramping up construction of new homes.<\/p>\n Here\u2019s more coverage of the housing and mortgage lending markets from Aarthi Swaminathan: <\/p>\n <\/p>\n For this week\u2019s ETF Wrap, Christine Idzelis interviews Rick Rieder, the chief investment officer of global fixed income at BlackRock, who talks about the firm\u2019s strategies for its actively managed exchange-traded bond funds.<\/p>\n Sam Reid co-manages the River Canyon Total Return Bond Fund RCTIX, which is rated five stars, the highest rating, by Morningstar. He explains how the fund makes use of credit-investing strategies employed by hedge funds managed by the same firm.<\/p>\n <\/p>\n The annual U.S. inflation rate was 3.2% in July, which is well above the Federal Reserve\u2019s long-term target of 2%. But inflation has come down enough for economists to change their tune, going from predictions that a recession would result from the Fed\u2019s cycle of interest-rate increases that began in March 2022, to talking about a \u201csoft landing\u201d scenario, with the Fed succeeding in tamping down inflation with only a mild recession resulting, to a buzzy new \u201cno landing\u201d scenario, in which the U.S. economy keeps chugging along with inflation remaining elevated. That may be the worst of the three scenarios for the stock market.<\/p>\n Greg Robb looks into a complicated set of scenarios and possible decisions for the Fed, including the ramifications for the 2024 election cycle.<\/p>\n <\/p>\n Michael Brush makes the case for buying stocks with high dividend yields right now, in part because a large portion of long-term returns for investors has come from the payouts.<\/p>\n Another approach to dividend stocks is to hold them long term to build income streams over time. This means the initial dividend yields may not be very high. Here are 20 dividend stocks that have been the best income growers in the S&P 500 over the past five years, among those that began with dividend yields of at least 1.5%.<\/p>\n The almost-daily news flow out of China as large property developers default on bond payments signals the need for the country\u2019s government to step up with a $1 trillion rescue plan, according to Marko Papic, the chief strategist at Clocktower Group, who spoke with Joy Wiltermuth.<\/p>\n But Isabel Wang spoke with economists who dig into a complicated set of reasons that investors shouldn\u2019t count on China\u2019s government to come up with a massive stimulus package. <\/p>\n More worries:<\/strong> Why U.S. stock-market investors need to keep an eye on a weak Japanese yen<\/p>\n <\/p>\n After hitting a 20-year record in September, the ICE U.S. Dollar Index More from Joseph Adinolfi: <\/strong>Same bank, two different stock-market calls. Why internal disagreements rage on Wall Street.<\/p>\n <\/p>\n Retailers had mixed news for investors this week, as usual, but there was also a lot of attention on shoplifting and other causes of inventory \u201cshrink.\u201d<\/p>\n First, the earnings news and corporate outlooks:<\/p>\n James Rogers reports on retailers comments\u2019 about theft and inventory shrink in general:<\/p>\n In the Financial Faceoff column, Leslie Albrecht compares prices for school supplies at Walmart and Target.<\/p>\n Andrew Keshner \u2014 the Tax Guy \u2014 has advice for a reader who, along with two siblings, inherited a house six years ago. One sibling wants to keep the house and the other two don\u2019t, but all three want to limit their tax burdens. Here are various scenarios for them to consider.<\/p>\n Keshner also reports on the Internal Revenue Service\u2019s new efforts to catch people who cheat on their taxes.<\/p>\n Taking off his tax hat, Keshner looks at the results of a study on consumer behavior that concludes that people are spending a lot of money on subscription services they don\u2019t even use. A self-audit can save you a lot of money.<\/p>\n
\n BX:TMUBMUSD10Y
\n declined to 4.22%.<\/p>\nHousing market evolves<\/h2>\n
How bond funds navigate the turbulence<\/h2>\n
From recession fear to \u2018soft landing\u2019 to \u2018no landing\u2019<\/h2>\n
Dividend stocks<\/h2>\n
China\u2019s trillion-dollar problem<\/h2>\n
Dollar roars back<\/h2>\n
\n DXY
\n fell to a low in July before taking a 4% upward swing. Joseph Adinolfi reviews factors leading to the dollar\u2019s rise and looks ahead at possible implications.<\/p>\nRetail \u2018shrink\u2019 and a price comparison<\/h2>\n
\n
\n WMT,
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\n CEO Doug McMillon indicated that shoplifting varies by region.<\/p>\n<\/li>\n
\n TGT,
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\n CEO Brian Cornell said the company was facing an \u201cunacceptable amount\u201d of theft, with some attributed to organized crime.<\/p>\n<\/li>\n
\n HD,
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\n are hoping a new federal law will help curb shoplifting. <\/p>\n<\/li>\n<\/ul>\nAdvice from the Tax Guy<\/h2>\n
Uber and the changing city<\/h2>\n