Federal Reserve Chairman Jerome Powell signalled on Wednesday that a rate cut could happen in September, as long as there is no major change or upset from the economic data. Given this confidence, market is shifting to long term US Treasury bonds and Reits.
And on Friday, US market tumbled on fear of possible recession and some reports are also expecting a bigger rate cut coming September.
Fortunately, a few months ago when the S&P500 and QQQ indexes were performing extremely well, and as part of re-balancing, I have sold off some and move them in tranches into the Bond etfs.
US Treasury Bonds
Below are the charts of the long term US treasury and corporate bond etf which has been moving up in the last few months. The technical indicators are also gaining strength over the last few months.
Reits
S-Reits have also reacted positively to the news on the coming rate cut, let's look at one of the largest S-Reit etf listed in SGX. Just this week, there was a nice breakout and if it is able to stay above, it will be on a long position now.
No comments:
Post a Comment