How High Will The Risk-Free Rate Rise?

[] Today's market commentary from TradingPub is here! To view this email as a web page, go [here.]( To view this email as a web page, go [here.]( [] [] [] How High Will The Risk-Free Rate Rise? {dear reader} For the last few weeks, I’ve discussed my concerns about interest rates and the need for the U.S. Treasury Department to get more buyers for the 10-year bond. The challenge for the U.S. economy ahead isn’t the strength of the dollar… The duration problem could see the 10-year bond rise significantly in the next year. With short-term interest rates still elevated, long-term bonds are less attractive to investors. As the government rolls over more debt in the next two years, the Department of the Treasury NEEDS to attract buyers on the tail end of the yield curve. The 10-year bond is already at a 16-year high coming out of August. But my view is that it needs to move to at least 5% in the next year. I’m not the only one. Bloomberg Talks Higher Rates Ed Harrison at Bloomberg suggested this morning that the 10-year bond could hit… take a breath… 5.25% in the next 12 months. The 10-year has been rising steadily since the collapse of Silicon Valley Bank (SVB) in March. And markets have largely avoided a significant debt-deficit shock in China for now. With fiscal-backed stimulus flowing around the globe, markets have remained resilient. That could come to an end - even if there is no recession in the year ahead. It would be a coup if the Treasury could issue long-term debt at cheaper rates than say the one- or two-year bond. Paying 4.5% or 5% for example over 10 years — instead of 5.25% for two years and then having to roll that debt over again — is a far more attractive way for governments to self-finance. Today, we’re around 4.25%. I expect rates to hit 5% simply because no one will want to buy bonds when inflation remains the top concern over the next few years. I am happy to align with the same forecast as Bank of America Corp. (NYSE: BAC). But Harrison is willing to go to 5.25%... While that rate hike would be good for savers and lenders… it will hammer two specific groups. The first is mortgage buyers… which you already know based on the direction of the housing market over the last 18 months. But there’s another group that could get crushed. Will the Zombies Lead the Market Lower? After 18 months, we’ve finally seen some cracks in the American consumer. Delinquency rates on mortgages and credit cards are rising… all while these forms of debt hit new record highs. As I’ve noted… it’s not a matter of rates that truly matter. Just the ability of borrowers to expand their balance sheets and borrow more money to keep going. Clearly, that is hitting a wall in the consumer economy. The same problems will start to emerge on the corporate side as well. The so-called “zombie stocks” will be hardest hit by an increase in the 10-year bond. These are companies that are unprofitable, burdened by unsustainable debt levels while maintaining high valuations that cannot be justified. The latter is critical because as the 10-year bond increases, these stocks must perform even better to justify their “hurdle” rates. A hurdle rate is the minimum acceptable rate of return required for an investment or project to be considered financially viable. For some of these companies, in comparison to a 5.25% risk-free rate from the 10-year bond, that hurdle rate might be 13% to 15%. And that’s unlikely. Meanwhile, these companies MIGHT be able to borrow more, but the question is whether anyone wants to lend to them. At some point, they might only have one more company willing to lend… or they will need to issue a secondary offering for shares or engage in other financial alchemy to stay alive. This problem is critical because MANY companies in the Russell 2000 fit the zombie status. And a surprise credit event or rate shock could fuel a big decline in these names — rattling investor confidence. I’ll walk you through a few examples of zombie stocks Wednesday, and show you the precise metrics you’ll need to eye to identify them by yourself. In this environment, we want to avoid these names as long-term investments and do our best to focus on good stocks with deep value, strong income and great fundamentals. This week, I’ll unveil my latest value stock at Tactical Wealth Investor, giving you a chance to get in on one great name for the long term. To get access to a ridiculously low entry price — one time only — [click here.]( [] Chat soon, Garrett {NAME} *This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. [] [] _________________________________________________ [] Cheating Isn’t ALWAYS Bad… As of late, Lance Ippolito’s ego has been getting bigger… And I’d imagine it's because his [trading has been on point…]( In a matter of three days, he closed all of these trades — they were his best of August! • 276% on ZIP — in two days! • 138% on TOST — overnight! • 100% on VST — overnight! Not bad right? But here is the thing… It’s not because he’s some trading prodigy… It’s because of his newest trading tool [— the News Flow Scanner —]( or NFS for short. It’s kind of like a cheat code for finding the best options opportunities the market has to offer… And for the first time — on a large scale — Lance has agreed to share the NFS and teach everyday folks exactly how to use it, just like he does. And who wouldn’t want that? [And Who Wouldn’t Want to Do That?!]( [] The performances displayed here are historical examples based on scanner signals for the time period shown. The profits and performance shown are not based on any sort of typicality as there are no published alerts associated. We make no future earnings claims, and you may lose money. [] _______________________________________________ [] Market Momentum is GREEN Momentum is Green, but the Russell 2000 ETF (IWM) could not hold the $190 level as I outlined last week. Momentum is declining at the moment, and investors continue to pile into energy stocks in the wake of the Saudi announcement that the nation will continue to support global prices through the balance of the year. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [] ___________________________________________ [] Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, [click here](. To download to your Android device, [click here](. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, [click here](. To download onto your MacOS, [click here](. 3. Then add the TradingPub channel and you’re done: [9_jjnFuAvno0MjNh]( See you there! Garrett [] [] [] How High Will The Risk-Free Rate Rise? {dear reader} For the last few weeks, I’ve discussed my concerns about interest rates and the need for the U.S. Treasury Department to get more buyers for the 10-year bond. The challenge for the U.S. economy ahead isn’t the strength of the dollar… The duration problem could see the 10-year bond rise significantly in the next year. With short-term interest rates still elevated, long-term bonds are less attractive to investors. As the government rolls over more debt in the next two years, the Department of the Treasury NEEDS to attract buyers on the tail end of the yield curve. The 10-year bond is already at a 16-year high coming out of August. But my view is that it needs to move to at least 5% in the next year. I’m not the only one. Bloomberg Talks Higher Rates Ed Harrison at Bloomberg suggested this morning that the 10-year bond could hit… take a breath… 5.25% in the next 12 months. The 10-year has been rising steadily since the collapse of Silicon Valley Bank (SVB) in March. And markets have largely avoided a significant debt-deficit shock in China for now. With fiscal-backed stimulus flowing around the globe, markets have remained resilient. That could come to an end - even if there is no recession in the year ahead. It would be a coup if the Treasury could issue long-term debt at cheaper rates than say the one- or two-year bond. Paying 4.5% or 5% for example over 10 years — instead of 5.25% for two years and then having to roll that debt over again — is a far more attractive way for governments to self-finance. Today, we’re around 4.25%. I expect rates to hit 5% simply because no one will want to buy bonds when inflation remains the top concern over the next few years. I am happy to align with the same forecast as Bank of America Corp. (NYSE: BAC). But Harrison is willing to go to 5.25%... While that rate hike would be good for savers and lenders… it will hammer two specific groups. The first is mortgage buyers… which you already know based on the direction of the housing market over the last 18 months. But there’s another group that could get crushed. Will the Zombies Lead the Market Lower? After 18 months, we’ve finally seen some cracks in the American consumer. Delinquency rates on mortgages and credit cards are rising… all while these forms of debt hit new record highs. As I’ve noted… it’s not a matter of rates that truly matter. Just the ability of borrowers to expand their balance sheets and borrow more money to keep going. Clearly, that is hitting a wall in the consumer economy. The same problems will start to emerge on the corporate side as well. The so-called “zombie stocks” will be hardest hit by an increase in the 10-year bond. These are companies that are unprofitable, burdened by unsustainable debt levels while maintaining high valuations that cannot be justified. The latter is critical because as the 10-year bond increases, these stocks must perform even better to justify their “hurdle” rates. A hurdle rate is the minimum acceptable rate of return required for an investment or project to be considered financially viable. For some of these companies, in comparison to a 5.25% risk-free rate from the 10-year bond, that hurdle rate might be 13% to 15%. And that’s unlikely. Meanwhile, these companies MIGHT be able to borrow more, but the question is whether anyone wants to lend to them. At some point, they might only have one more company willing to lend… or they will need to issue a secondary offering for shares or engage in other financial alchemy to stay alive. This problem is critical because MANY companies in the Russell 2000 fit the zombie status. And a surprise credit event or rate shock could fuel a big decline in these names — rattling investor confidence. I’ll walk you through a few examples of zombie stocks Wednesday, and show you the precise metrics you’ll need to eye to identify them by yourself. In this environment, we want to avoid these names as long-term investments and do our best to focus on good stocks with deep value, strong income and great fundamentals. This week, I’ll unveil my latest value stock at Tactical Wealth Investor, giving you a chance to get in on one great name for the long term. To get access to a ridiculously low entry price — one time only — [click here.]( [] Chat soon, Garrett {NAME} *This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. [] [] _________________________________________________ [] Cheating Isn’t ALWAYS Bad… As of late, Lance Ippolito’s ego has been getting bigger… And I’d imagine it's because his [trading has been on point…]( In a matter of three days, he closed all of these trades — they were his best of August! - 276% on ZIP — in two days! - 138% on TOST — overnight! - 100% on VST — overnight! Not bad right? But here is the thing… It’s not because he’s some trading prodigy… It’s because of his newest trading tool [— the News Flow Scanner —]( or NFS for short. It’s kind of like a cheat code for finding the best options opportunities the market has to offer… And for the first time — on a large scale — Lance has agreed to share the NFS and teach everyday folks exactly how to use it, just like he does. And who wouldn’t want that? [And Who Wouldn’t Want to Do That?!]( [] The performances displayed here are historical examples based on scanner signals for the time period shown. The profits and performance shown are not based on any sort of typicality as there are no published alerts associated. We make no future earnings claims, and you may lose money. [] _______________________________________________ [] Market Momentum is GREEN Momentum is Green, but the Russell 2000 ETF (IWM) could not hold the $190 level as I outlined last week. Momentum is declining at the moment, and investors continue to pile into energy stocks in the wake of the Saudi announcement that the nation will continue to support global prices through the balance of the year. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [] ___________________________________________ [] Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, [click here](. To download to your Android device, [click here](. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, [click here](. To download onto your MacOS, [click here](. 3. Then add the TradingPub channel and you’re done: [9_jjnFuAvno0MjNh]( See you there! Garrett [] A TradingPub Publication ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. TradingPub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from TradingPub LLC are for your informational purposes only. Neither TradingPub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. TradingPub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by TradingPub 101 Marketside Ave, Suite 404 PMB 318 Ponte Vedra, Florida 32081, United States [] A TradingPub Publication ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. TradingPub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from TradingPub LLC are for your informational purposes only. Neither TradingPub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. TradingPub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by TradingPub 101 Marketside Ave, Suite 404 PMB 318 Ponte Vedra, Florida 32081, United States