SGOV Stock Recent News

Although the Fed has held interest rates steady at the July FOMC meeting, weak economic data makes a September rate cut increasingly likely. The Fed will join global central banks as they embark on an easing cycle, potentially reducing interest income for SGOV investors. While SGOV remains a risk-free safe-haven asset, its attractiveness is diminished as its distribution yield is set to decline.

Treasury bills are attractive to value investors due to good returns and lower interest in main companies in indices. SGOV ETF offers over 5% yield, tactical stock market exposure possibility, and low volatility. Stock indices are structurally important, but caution could be used due to high valuations and potential corrections.

The significant decline in April and May services inflation and revolving consumer credit growth indicate demand-driven disinflationary patterns. The labor market appears to be facing a typical recessionary trend: a lower number of full-time workers (without second jobs) compared to the total working-age population. Job growth may be strong, but that is primarily driven by a rising need for part-time jobs to offset lower real disposable household income.

SGOV: If The Fed Cuts Rates, An Interesting Yield Play For Some Time

The iShares 0-3 month Treasury Bond ETF invests in treasury bills. With inflation stubbornly high, the prospect for Fed rate cuts have dimmed considerably, which is a positive for SGOV as investors can earn high treasury bill yields for longer. I am raising SGOV back to a buy and believe it remains the best 'cash' asset to hold until further notice.

Predictions of rate cuts by the Federal Reserve have decreased due to low unemployment and signs of an inflationary rebound.

Conservative investors have been favoring the iShares 0-3 Month Treasury ETF, which pays out a yield of 5%+. With the Fed proclaiming "peak rates" this month, the future of rates is uncertain and likely lower. Lower future rates make fixed-rate investments like CDs more attractive than SGOV if the Fed is to be believed.

SGOV is still a great option for fixed-income investors to wait for a good time to invest in longer-term bonds. The market was too optimistic about rate cuts in 2024, making SGOV an attractive choice. SGOV offers a stable yield and protection against capital depreciation as rate cut predictions fluctuate.

Cash has reemerged as a valuable asset class, earning a healthy spread over inflation. Ultrashort bond and treasury ETFs, such as iShares 0-3 Month Treasury Bond ETF, have become popular as their dividend rates continue to rise. SGOV offers a balance of price stability and yield, making it a good option for earning interest while preserving principal.

Big tech earnings and the Fed meeting dominated the headlines, with the S&P 500 and Nasdaq finishing the week up. META was the winner this earnings season, with shares climbing 19.2% after a strong quarter.