TBT Stock Recent News

The Fed's shift to a more accommodative monetary policy may not guarantee a bond market rally due to high U.S. debt and declining foreign demand. The U.S. dollar's faltering reserve currency status and political division further erode confidence in U.S. government bonds, increasing borrowing costs. ProShares UltraShort 20+ Year Treasury ETF offers a leveraged bearish bet on bonds, benefiting from potential declines in long-term U.S. Treasury bonds.

TBT remains a Buy as the bond market shows downward momentum, and there are likely more advances in store for TBT price and volume. The effects of the global pandemic regime have produced a strong Fed pivot that will likely reverberate through markets for some time. Technical analysis suggests a new bull market for TBT, while fundamental analysis indicates that the high rate of core inflation should result in higher trading prices of this instrument.

The Treasury term premium is back above zero, indicating that investors are demanding higher yields for long-dated Treasuries. The ProShares UltraShort 20+ Year Treasury ETF is recommended for short-term trading due to its leverage and momentum characteristics. Yields may continue to rise, benefiting TBT, as factors such as reduced Treasury holdings by Japan and China and quantitative tightening by the Fed impact the market.

The Federal Reserve's dovish stance and economic indicators suggest that unemployment is rising close to where it should be and inflation is falling. TBT, a high duration ETF sensitive to market interest rates, is likely to depreciate in the near future due to the changing macroeconomic landscape. Investors should focus on quality growth stocks at good valuations and consider closing out TBT trades.

Treasury bonds have faced underperformance due to unexpected inflation levels, but recent trends indicate a decrease in inflation. The combination of slowing inflation and economic growth is positive for long-term treasuries, making them attractive at current valuations. The bearish stance on the ProShares UltraShort 20+ Year Treasury ETF is based on the expectation of lower yields due to decreasing inflation and potential unemployment increases.

TBT is an inverse ETF that appreciates when long-dated Treasury bonds sell off and rates move higher. The fund was a big winner in 2022 amid the bond market volatility which is a theme that remains in place.

The Treasury market has been bearish lately after strong jobs data. I like to refer to price action on TLT to determine where the leveraged-short TBT ETF will go.

TBT provides -2x 1-day returns of the ICE U.S. Treasury 20+ Year Bond Index. Betting against long-bonds have been the right trade in 2022, with the TBT returning 113% YTD to October 31, 2022.

Inverse bond funds have had a great year. Given inflation stays elevated, they still have room to rise.

Investors who think TBT stock will continue to rally and don't want to risk significant amounts of capital can use long call options rather than buying the stock outright. The post This Call Option Trade On TBT Stock Benefits From Rising Yields appeared first on Investor's Business Daily.