30-Year Yields Rise Above 5% As Biden Announces 'Unprecedented' Congress Support For Israel
Portfolio Pulse from Piero Cingari
The yields on 30-year Treasuries crossed the 5% mark after President Joe Biden committed to an 'unprecedented support package for Israel.' Yields on 10-year Treasuries also rose, reaching 4.9%. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) declined by 1.3%, extending its year-to-date decline to 18%. The SPDR Gold Trust ETF (NYSE:GLD) increased by 1.5% reflecting the increasing geopolitical risks in the Middle East. The S&P 500 Index, as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY), dropped by 0.5%. Defense stocks outperformed, with the iShares U.S. Aerospace & Defense ETF (NYSE:ITA) rising by 0.6%.
October 18, 2023 | 3:15 pm
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NEGATIVE IMPACT
The S&P 500 Index, as tracked by the SPDR S&P 500 ETF Trust, dropped by 0.5%.
The ETF tracks the S&P 500 Index, which is likely being negatively impacted by the rising Treasury yields and geopolitical uncertainty.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The iShares 20+ Year Treasury Bond ETF declined by 1.3% due to rising Treasury yields.
The ETF's price is inversely related to Treasury yields. As yields rise, the price of the ETF falls.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
The SPDR Gold Trust ETF increased by 1.5% reflecting the increasing geopolitical risks in the Middle East.
Gold is often seen as a safe haven asset during times of geopolitical uncertainty, which is likely driving the price of the ETF up.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Defense stocks outperformed, with the iShares U.S. Aerospace & Defense ETF rising by 0.6%.
The ETF is likely benefiting from President Biden's commitment to support Israel, which could lead to increased defense spending.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100