La vendita allo scoperto per SPDR Bloomberg 1-3 Month T-Bill ETF dà agli investitori un'idea del grado in cui gli investitori stanno scommettendo sul declino delle azioni di SPDR Bloomberg 1-3 Month T-Bill ETF. I dati relativi alle vendite allo scoperto vengono aggiornati ogni due settimane.

SPDR Bloomberg 1-3 Month T-Bill ETF (ARCA:BIL), Report sulle vendite allo scoperto

SPDR Bloomberg 1-3 Month T-Bill ETF

SPDR Bloomberg Barclays 1-3 Month T-Bill ETF

The fund invests substantially all, but at least 80%, of its total assets in the securities comprising the index and in securities that the Adviser determines have economic characteristics that are substantially identical to the economic characteristics of the securities that comprise the index. The index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of greater than or equal to 1 month and less than 3 months.

Bilia AB

Kinovo PLC

Macquarie ETF Trust Macquarie Global Listed Infrastructure ETF

Bilibili Inc. - American Depositary Shares

Bilibili Inc

BILL Holdings Inc

SPDR Bloomberg 3-12 Month T-Bill ETF

Belle Isle Corp

PIMCO U.S. Treasury Index Fund PIMCO Ultra Short Government Active Exchange-Traded Fund

The Federal Reserve&#8217;s decision cut interest rates by 0.5% on Wednesday <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40943496/fed-rate-cut-eases-debt-refinancing-for-smaller-cloud-computing-firms-analyst-flags">may pull investors</a> away from money market funds and into longer duration bonds, according to a portfolio manager.
Total money market fund assets&nbsp;decreased by $20.02 billion to $6.30 trillion for a week ending on Wednesday, Sept. 18, the Investment Company Institute said. Among taxable money market funds, government funds&nbsp;decreased by $18.82 billion and prime funds decreased by $2.42 billion.&nbsp;
&#8220;Historically, we&#8217;ve seen more assets move into longer duration bonds when yields have fallen, and I think we&#8217;ve already seen some of that happen this year,&#8221; said Timothy Ng, a fixed-income portfolio manager with Capital Group.
&#8220;I expect this trend to continue as the Fed continues to cut rates,&#8221; he said.
Read Also: <a href="https://www.benzinga.com/real-estate/reit/24/09/40949753/mortgage-rates-near-6-demand-increases-for-refinancing-purchases">Mortgage Rates Near 6%, Demand Increases For Refinancing, Purchases</a>
&#8220;I think some of that flow will go into both equities and bonds, but in terms of relative scale, it will likely depend on the outlook for the economy, valuations and market sentiment between the two asset classes.&#8221;
A lot of assets moved into the money markets in recent years because money market yields were very attractive, but that may no longer be the case as the Fed plans to make further rate cuts this year, he said.
&#8220;Now you&#8217;re not getting as much yield waiting around, and you run the risk of missing out on capital appreciation that comes with having more duration in your portfolio as yields fall,&#8221; he said.
Price Action: Exchange-traded funds that hold money market funds gained slightly into Friday&#8217;s late-afternoon trading.
<ul id="mntl-sc-block_7-0">
<li>iShares Short Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SHV#NASDAQ">SHV</a>) gained 0.05%</li>
<li>BlackRock Short Maturity Bond ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/NEAR#BATS">NEAR</a>) rose 0.06%</li>
<li>SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) went up 0.044%</li>
<li>Invesco&nbsp;Ultra Short Duration ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GSY#NYSE">GSY</a>) picked up 0.07%</li>
</ul>
Read Now:
<ul>
<li><a href="https://www.benzinga.com/news/24/09/40950904/claudia-sahm-underscores-feds-mandate-to-protect-jobs-says-additional-cuts-expected-the-time-to-supp">Claudia Sahm Underscores Fed&#8217;s Mandate to Protect Jobs, Says Additional Cuts Expected: &#8216;The Time To Support The Labor Market Is When It&#8217;s Strong&#8217;</a></li>
</ul>
Photo: Shutterstock

Economics

Federal Reserve

Markets

ETFs

NEAR

Fed Rate Cut May Drive Investors Away From Money Markets, Says Portfolio Manager

ETFs across various categories pulled in $4.4 billion in capital last week, pushing the year-to-date inflows to $532 billion. U.S. fixed-income ETFs led the way with $3.4 billion in inflows, followed by inflows of $2.4 billion in leveraged ETFs and $2.2 billion in U.S. equity ETFs.
Vanguard S&amp;P 500 ETF (ARCA:VOO), Direxion Daily Semiconductor Bull 3x Shares (ARCA:SOXL), SPDR Bloomberg 1-3 Month T-Bill ETF (ARCA:BIL), Invesco QQQ Trust (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/qqq#NASDAQ">QQQ</a>) and Schwab Intermediate-Term U.S. Treasury ETF (ARCA:SCHR) dominated the top creation list last week.
Wall Street witnessed a rollercoaster ride last week, dropping sharply and then climbing up. The S&amp;P 500 recouped all its losses to end the week after the Aug 5 steep sell-off prompted by fears of a recession following weak jobs data. The Dow Jones Industrial Index shed 0.6% and the tech-heavy Nasdaq Composite Index fell 0.2% last week.
The batch of early last week&#39;s data showed weakening labor markets and a slump in manufacturing that spurred recession concerns and battered global stock markets. Though these data signal a slowdown, the U.S. economy is far from recession anytime soon. The latest data shows that U.S. services sector activity rebounded from a four-year low in July amid a rise in orders and employment. The ISM survey&#39;s new orders measure rebounded to 52.4 from 47.3 in June, which was the lowest since December 2022.
Investors are betting that the Fed will respond to signs of weakness in the economy with more aggressive interest rate cuts. Per CME Group data, most investors expect larger cuts in the September meeting, with futures implying a 51% probability of a 50 bps cut and 49% odds of a 25 bps reduction. Lower interest rates generally lead to reduced borrowing costs, which help businesses expand their operations more easily, resulting in increased profitability. This, in turn, stimulates economic growth and provides a boost to the stock market.
We have detailed the ETFs below:
Vanguard S&amp;P 500 ETF
Vanguard S&amp;P 500 ETF topped the asset flow creation last week, gathering $3 billion in capital. It tracks the S&amp;P 500 Index and holds 504 stocks in its basket, each accounting for no more than 7.2% of the assets. Vanguard S&amp;P 500 ETF is heavy on the information technology sector, while financials and healthcare round off the next two spots with a double-digit allocation each.
Vanguard S&amp;P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 4 million shares. It has AUM of $463.8 billion and a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.
Direxion Daily Semiconductor Bull 3x Shares
Direxion Daily Semiconductor Bull 3x Shares has gathered $1.7 billion in its asset base, propelling its AUM to $10.5 billion. It targets the semiconductor corner of the technology sector with three times leveraged exposure to the NYSE Semiconductor Index. Direxion Daily Semiconductor Bull 3x Shares charges 72 bps in fees per year and trades in an average daily volume of 67 million shares.
SPDR Bloomberg 1-3 Month T-Bill ETF
SPDR Bloomberg 1-3 Month T-Bill ETF saw an inflow of $1.6 billion last week. It seeks to provide exposure to zero-coupon U.S. Treasury securities with a remaining maturity of 1-3 months. It follows the Bloomberg 1-3 Month U.S. Treasury Bill Index, holding 24 securities in its basket. Both average maturity and adjusted duration are at 0.13 years each.
SPDR Bloomberg 1-3 Month T-Bill ETF has AUM of $34.4 billion and an average daily volume of 7 million shares. It charges 13 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Invesco QQQ Trust
Invesco QQQ Trust has accumulated $1.4 billion in capital. It provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ has a modest concentration on the top firms.
Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with an AUM of $271 billion and an average daily volume of 33 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.
Schwab Intermediate-Term U.S. Treasury ETF
Schwab Intermediate-Term U.S. Treasury ETF saw an inflow of $1.2 billion. It offers exposure to the intermediate-term U.S. Treasury bond market and follows the Bloomberg US Treasury 3-10 Year Index. It has an effective duration of 5.00 years and an average maturity of 5.60 years. With AUM of $9.7 billion, Schwab Intermediate-Term U.S. Treasury ETF trades in an average daily volume of 1.2 million and has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.
<a href="https://www.zacks.com/stock/news/2321389/5-hot-etfs-of-last-week?cid=CS-BENZ-FT-etf_news_and_commentary-2321389">To read this article on Zacks.com click here.</a>

Large Cap

News

Analyst Ratings

Trading Ideas

SCHR

SOXL

5 Hot ETFs of Last Week

U.S. Treasuries are poised to come in even despite having a very volatile <a href="https://www.benzinga.com/news/treasuries">first six months of 2024</a>.
A Bloomberg index of returns in this bond market has declined a mere 0.1% for the year. It fell as much as 3.4% in April.
The rebound indicates that investor outlook might be positive in light of falling U.S. prices prompting the Federal Reserve to cut interest rates sooner. 
"We've seen the peak in yields," Stephen Miller, investment strategist at GSFM in Sydney, told <a href="https://www.bloomberg.com/news/articles/2024-06-19/treasuries-a-whisker-away-from-erasing-2024-losses-on-rates-bets?srnd=homepage-americas&amp;sref=TBDibEcD">Bloomberg</a>. "Bonds are now back as having a deserved place in a multi-asset portfolio."
Treasuries have been sent in opposite directions in 2024 as policy-sensitive two-year yields have soared above 5% in April as fears over higher-for-longer U.S. rates spurred investors to dump bonds.
Also Read: <a href="http://Tokenized US Treasury Notes Market Value Exceeds $1B: Report">Tokenized US Treasury Notes Market Value Exceeds $1B &#8211; Report</a>
They have since returned to around 4.7% as inflation-to-retail-sales data suggested the U.S. economy may finally be cooling enough to justify lower borrowing costs.
Fed Governor Adriana Kugler <a href="https://www.benzinga.com/top-stories/24/06/39391685/fed-members-cool-on-raising-interest-rates-these-conditions-could-take-months-and-more-likely-quarte">said on Tuesday </a>that it will likely be appropriate for the central bank to reduce rates "sometime later this year" if economic conditions unfold as anticipated. 
St. Louis Fed President Alberto Musalem said in his first major policy speech that it could take "quarters" for the data to support a cut.
Volatility in the $27 trillion Treasury market has fallen from recent highs as the views of the Fed and investors over the number of rate cuts expected this year have begun to gel. 
The ICE BofA&nbsp;MOVE&nbsp;Index — a gauge of bond volatility that tracks anticipated swings in US yields based on options — is hovering at about 98, down from an April high of 121, Bloomberg reported.
Price Action: SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) remained flat before Thursday&#8217;s opening bell, while iShares 7-10 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NASDAQ">IEF</a>) declined 0.4%; iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) fell 1% in pre-market trading on Thursday.
Read Now: <a href="https://www.benzinga.com/markets/cryptocurrency/24/02/36948187/janet-yellen-sounds-alarm-on-crypto-risks-in-congressional-testimony-urges-legislative-act">Janet Yellen Sounds Alarm On Crypto Risks In Congressional Testimony, Urges Legislative Action</a>

US Treasuries Set To Break Even After Rocky First Half Of 2024

Russia launched an unprecedented aerial attack on Ukraine, firing 122 missiles and deploying numerous drones, resulting in the tragic death of <a href="https://www.benzinga.com/topic/russia-ukraine-war">at least 22 civilians</a>. 
Ukrainian officials have <a href="https://www.cbsnews.com/news/ukraine-russia-most-massive-aerial-attack/">described</a> it as the most extensive aerial barrage since Russia&#8217;s full-scale invasion in February 2022.
The Ukrainian air force claims to have intercepted most of the ballistic and cruise missiles, showcasing the country&#8217;s defense capabilities in the face of the relentless assault. 
See Also: <a href="https://www.benzinga.com/news/23/12/36374438/trump-putin-friendship-fiona-hill-reveals-putin-has-trumps-number-and-still-views-him-as-an-asset">Trump-Putin Friendship? Fiona Hill Reveals Putin &#8216;Has Trump&#8217;s Number&#8217; And Still Views Him &#8216;As An Asset&#8217;</a>
President Volodymyr Zelenskyy highlighted the diverse array of weapons used by Russia, including ballistic and cruise missiles, underlining the severity of the attack.
Notably, this marks a significant escalation compared to previous assaults, with the Ukrainian Air Force reporting that the last major attack involved 96 missiles in November 2022. The severity of the current situation raises concerns about the potential economic impact on global markets.
Ukrainian Air Force spokesman Yurii Ihnat noted that Russia seemingly utilized all available weaponry in this latest assault. As the conflict intensifies, investors are likely to turn their attention to traditional safe-haven assets (i.e., gold and government bonds). They&#8217;re also closely monitoring the performance of defense and energy stocks:
<ul>
<li>The SPDR Gold Trust ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>) </li>
<li>The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>)</li>
<li>The iShares 7-10 Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NYSE">IEF</a>) </li>
<li>The SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) </li>
<li>The iShares U.S. Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITA#NYSE">ITA</a>) </li>
<li>And the Energy Select Sector SPDR ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) </li>
</ul>
The unfolding geopolitical situation underscores the inherent uncertainties in the market. Investors are grappling with the potential consequences of heightened hostilities between Russia and Ukraine. Market participants are advised to stay vigilant and responsive to evolving geopolitical developments.
Now Read: <a href="https://www.benzinga.com/news/23/12/36380487/experts-warn-russia-china-forming-military-alliance-to-counter-us-dominance-would-present-the-united">Experts Warn Russia, China Forming Military Alliance &#8216;Would Present The United States With A Threat Unlike Any It Has Confronted&#8217;</a>

Asia

Macro Economic Events

Sector ETFs

Eurozone

Global

iShares Dow Jones US Aerospace & Defense Index Fund

Russia's Biggest Ukrainian Attack To Date: Unpacking Latest  Missile, Drone Salvo

For the first quarter of 2024, JPMorgan Chase &amp; Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>) is for overweight U.S. equity, Japanese equity, U.S. Treasury and high-yield corporate debt. The company said &#8220;cash returns are <a href="https://www.benzinga.com/markets/equities/23/11/35614060/warren-buffett-led-berkshire-hathways-ginormous-157b-cash-pile-is-nearing-levels-held-by-one-of-">set to fall</a>&#8221; and the U.S. stock market would &#8220;likely see the S&amp;P 500 test the 5,000 l<a href="https://www.benzinga.com/news/23/12/36229445/amazon-and-alphabet-top-picks-for-2024-jpmorgan-bets-on-continued-mega-cap-tech-rally">evel in 2024</a>.&#8221;
Read: <a href="https://www.benzinga.com/economics/23/12/36069647/2024-outlook-put-pause-pivot">2024 Outlook: Put, Pause, Pivot</a>
John Bilton, head of Global Multi-Asset Strategy at JPMorgan, and his team <a href="https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/portfolio-insights/pi-gaav.pdf">shared</a> insights from the Multi-Asset Solutions Strategy Summit they had recently.
&#8220;We see positive U.S. stock performance broadening beyond tech as an improving U.S. inventory cycle boosts cyclical sectors,&#8221; said Bilton. &#8220;Japanese stocks remain attractive, given rerating potential driven by corporate governance reforms.&#8221;
Here&#8217;s a quick look at their perspective on each asset class and few trading ideas around them (added by author):
<h2 class="wp-block-heading">Equity</h2>
JPMorgan is overweight on U.S., U.K. and Japanese equity, and underweight on European equity and Emerging Markets (ex-China).
<ul>
<li>U.S.: Expectations for an earnings growth estimate of 7% into the next year. Lower rates to provide support to stock multiples. Cash generation potential in U.S. equity. Equities outlook is also improving as the earnings downgrade cycle appears to be bottoming. The SPDR S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), the iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>) and the Vanguard 500 Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>) are popular funds to gain exposure to broad-market U.S. equity.</li>
<li>U.K.: U.K. equity is cheap and supported by valuations and flows. It is a defensive market; with a positive gearing towards commodities. The iShares MSCI United Kingdom ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWU#NYSE">EWU</a>) is a popular U.K. equity tracking ETF.</li>
<li>Japan: Japanese stocks remain attractive. There&#8217;s rerating potential, given improving nominal growth in the country and scope for valuation expansion. The corporate governance reforms mandated by the Tokyo Stock Exchange should support shareholder returns and drive up ROE. The iShares MSCI Japan ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWJ#NYSE">EWJ</a>) offers exposure to Japanese equity.</li>
<li>Europe: European growth is expected to remain sluggish going into 2024. </li>
<li>EM: Emerging market equities, though cheap, lack clear catalysts for a rebound. </li>
</ul>
<h2 class="wp-block-heading">Fixed-Income</h2>
From the fixed-income space, JPMorgan is overweight U.S. Treasury and high-yield corporate. It is underweight EMD hard currency.
<ul>
<li>The prospect of rate cuts in 2024 supports a duration overweight position. Yields may begin to fall steadily as rate cuts begin.</li>
<li>Investors should prefer U.S. Treasuries to other G4 countries. Yields in the low 4s should be attractive ahead of Fed rate cuts. JPMorgan sees potential returns of 10%–20% if growth disappoints. The iShares 20+ Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NYSE">TLT</a>), the iShares 7-10 Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NYSE">IEF</a>) and the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) are popular ways to get exposure to U.S. Treasury.</li>
<li>Overweight corporate high-yield debt as there&#8217;s modest scope for spread tightening. Fundamentals appear supportive with limited rise in defaults. Overall, the carry looks attractive. The iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>) and the iShares Broad USD High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USHY#NYSE">USHY</a>) are two of the largest ETFs providing exposure to high-yield corporate debt in the U.S.</li>
</ul>
<h2 class="wp-block-heading">Currency &amp; Cash</h2>
The US dollar, as tracked by the Invesco DB US Dollar Index Bullish Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), appears set to weaken in 2024. JPMorgan sees a soft landing for the greenback as growth broadens out globally.
Rate cuts possibility in the U.S. further supports a US dollar underweight position.
Bilton is also underweight on cash. &#8220;Cash returns set to fall as cutting cycle begins; long-term USD rates likely nearer 2.5% than 5.5%,&#8221; he laid out.
Now Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/11/35837453/goldman-sachs-2024-equity-outlook-winning-stocks-and-sectors-to-watch">Goldman Sachs&#8217; 2024 Equity Outlook: Winning Stocks And Sectors To Watch</a>

Analyst Color

Broad U.S. Equity ETFs

Currency ETFs

USHY

PowerShares DB US Dollar Index Bullish Fund

S&P 500 Likely To 'Test The 5,000 Level': JP Morgan On Where To Allocate In 2024

Legendary investor Warren Buffett is making a strategic, albeit surprising, move by reducing exposure to equities and increasing his cash holdings on the heels <a href="https://www.benzinga.com/markets/equities/23/11/35614060/warren-buffett-led-berkshire-hathways-ginormous-157b-cash-pile-is-nearing-levels-held-by-one-of-">of appealing interest rates.</a> 
According to the latest quarterly financial results of his conglomerate, Berkshire Hathaway Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BRK#NYSE">BRK</a>), the position in cash, cash equivalents, and U.S. Treasury Bills rose to $157.2 billion in value at the end of September. 
A significant portion, approximately $127.6 billion, was invested in U.S. Treasury Bills, which typically mature within a year. This represented an increase of $10 billion compared to the end of June 2023. 
Berkshire Hathaway&#8217;s cash stockpile is now at its highest level since the third quarter of 2021.
<h2 class="wp-block-heading">Warren Buffett Wisdom: Cash Is Far from Trash</h2>
&#8220;We bought $10 billion in Treasuries this Monday. And the only question for next Monday is whether we will buy $10 billion in 3-month or 6-month T-bills,&#8221; he said in a CNBC interview. &#8220;There are some things people shouldn&#8217;t worry about.&#8221;
Berkshire Hathaway&#8217;s net acquisitions of U.S. Treasury Bills and fixed maturity securities surged to $134.2 billion during the initial nine months of 2023, marking a significant increase from the $69.37 billion recorded in the same period of 2022.
&#8220;We continue to hold substantial balances of cash, cash equivalents, U.S. Treasury Bills and other investments with relatively short maturities. We continue to believe that maintaining ample liquidity is paramount and we insist on safety over yield with respect to short-term investments,&#8221; Berkshire Hathaway wrote in its third-quarter report. 
Buffett&#8217;s influence appears to have resonated strongly among market participants, as they allocated a significant $3.2 billion into the cash-like SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) over the past week, marking the largest weekly inflow since April 2020.
Due to the shift toward cash, Berkshire Hathaway&#8217;s equity stock portfolio witnessed a reduction. At the end of the third quarter, it stood at $341 billion, down from $375.8 billion at the end of June.
Read now: <a href="https://www.benzinga.com/trading-ideas/dividends/23/11/35593045/want-to-make-money-while-you-sleep-here-are-warren-buffetts-top-dividend-picks">Want To Make Money While You Sleep? Here Are Warren Buffett&#8217;s Top Dividend Picks</a>

Bonds

Treasuries

What Warren Buffett Says You Should Buy Right Now After Berkshire Hathaway Meeting

October jobs report numbers missed expectations Friday, and came in at nearly half of September's <a href="https://www.benzinga.com/economics/macro-economic-events/23/11/35589503/labor-market-shows-signs-of-softening-october-payrolls-decline-to-150-000-below-e">reported figures</a>. 
Non-farm payrolls increased by 150,000 jobs in October, registering a steep decline from September's 297,000 jobs. The figure fell short of market forecasts, which stood at 180,000. One key reason for the deceleration is likely the <a href="https://www.benzinga.com/topic/uaw">United Auto Workers strikes</a>, which resulted in a net loss of jobs for the manufacturing sector.
<h2 class="wp-block-heading">Market Reaction To The US Jobs Report</h2>
Treasury yields tumbled across the board. The yield on the two-year Treasury fell to 4.87%, a decrease of more than 10 basis points, while the 10-year Treasury yields fell by 11 basis points to 4.56%. The benchmark Treasury yield has declined this week from recent highs, when it occasionally traded above the 5% threshold.
The dip in yields led to gains in exchange-traded funds invested in T-bonds. At the time of writing, these ETFs were recording the following price action Friday: 
<ul>
<li>iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) was up 1.59%.</li>
<li>Vanguard Long-Term Treasury ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VGLT#NASDAQ">VGLT</a>) gained 1.58%.</li>
<li>iShares 7-10 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NASDAQ">IEF</a>) gained 1.03%.</li>
<li>SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) was up 0.02%.</li>
<li>iShares 1-3 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SHY#NASDAQ">SHY</a>) was up 0.19%.</li>
</ul>
Also Read: <a href="https://www.benzinga.com/economics/macro-economic-events/23/11/35570015/october-jobs-report-expected-to-show-dip-heres-how-markets-may-react">October Jobs Report Expected To Show Dip — Here&#8217;s How Markets May React</a>
<h2 class="wp-block-heading">5 Economists React To NFPs Report</h2>
Joseph Brusuelas, chief economist at RSM US LLP, said the moderation in the pace of hiring points towards a cooler pace of growth and inflation. This could actually be needed by the American economy, which has been hiring and expanding at a torrid pace in recent months, he said. 
Lawrence Yun, chief economist at NAR, sees the Federal Reserve pivoting from raising interest rates to the neutral stance it has now to eventually cutting interest rates next year. &#8220;Be ready for more home buyers and more home sellers,&#8221; he said. 
Oliver Rust, head of product at Truflation, said the unemployment figures suggest the effect of monetary policy tightening is not feeding through to the labor market in a meaningful way. As such, he warns that an interest rate hike in December may be back on the table.
Brad McMillan, CIO for Commonwealth Financial Network, said the job report will help keep the Fed on the sidelines going forward. Since the dip in job numbers was anticipated, McMillan said the actual numbers — adjusted for the UAW strike — are probably better than the report ,indicating that despite the slowdown, job growth remains healthy overall.
Chris Zaccarelli, CIO for Independent Advisor Alliance, said the jobs report is one to trigger a &#8220;risk-on rally&#8221; into year-end. &#8220;Given that jobs growth is slowing and the unemployment rate is ticking up slightly, that is the kind of data that will keep the Fed on hold and both stock and bond prices should move higher (bond yields lower) in the absence of a more aggressive Fed, &#8221; he said. 
&#8220;The market climbs a wall of worry and we may see many more gains — in the form of a short squeeze and FOMO — before the next bear market begins,&#8221; he said. 
Read Next: <a href="https://www.benzinga.com/economics/macro-economic-events/23/10/35272828/economists-see-recession-risk-waning-end-of-fed-rate-hikes-how-could-treasury-etf">Economists See Recession Risk Waning, End Of Fed Rate Hikes: How Could Treasury ETFs React To Yields?</a>
Photo via Shutterstock.

Econ #s

iShares Trust Barclays 1-3 Year Treasury Bond Fund

VGLT

Much-Needed Cooling Off Or Risk-On Rally Ahead? Yields Tumble, Bonds Gain After October Jobs Report

WIIM

BILL shares are trading lower after the company cut FY24 guidance.

The U.S. Treasury released its quarterly refunding statement Wednesday, letting anxious bond holders catch some breath. 
The &#8220;Treasury currently expects privately-held net marketable borrowing of $776bln in Q1 FY 2024&#8230; lower than what was cited at the August refunding, primarily due to projections of higher receipts which were somewhat offset by higher outlays,&#8221; the report said. 
While the <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/10/35519171/fed-meeting-preview-bank-of-america-expects-one-more-interest-rate-hike-and-heres-w">Fed&#8217;s FOMC meeting</a> Wednesday is in the spotlight for most market watchers, fixed income investors are watching the U.S. Treasury. The Treasury&#8217;s borrowing plans help bond market investors such as those invested in the iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>), the iShares 7-10 Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NASDAQ">IEF</a>) and the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) better position themselves and their portfolios.
The U.S. Department of the Treasury is offering $112 billion in Treasury securities to refund approximately $102.2 billion of privately held Treasury notes maturing on Nov. 15, 2023.&nbsp;This issuance will raise new cash from private investors of approximately $9.8 billion.&nbsp;The securities are:
<blockquote class="wp-block-quote"><ul>
<li>A three-year note in the amount of $48 billion, maturing Nov. 15, 2026;</li>
<li>A 10-year note in the amount of $40 billion, maturing Nov. 15, 2033; and</li>
<li>A 30-year bond in the amount of $24 billion, maturing Nov. 15, 2053.</li>
</ul>
<cite>Source: Nov 1 Quarterly Refunding Statement &#8211; US Treasury</cite></blockquote>
Also Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/10/35378461/10-year-yield-at-5-triggers-waves-of-treasury-buyers-bill-ackman-technical-indicato">10-Year Yield At 5% Triggers Waves Of Treasury Buyers: Bill Ackman, Technical Indicators Hint At Potential Shift</a>
The Treasury said it recognizes that 10-year yields have experienced significant fluctuations, trading within a 100-basis-point range since the last meeting in August. Two-year Treasury yields have been comparatively more stable but still traded in a 45-basis-point range. 
Strong economic and labor market data, the possibility of a higher neutral interest rate, supply-demand dynamics and a positive &#8220;term premium&#8221; in long-dated Treasury securities were cited as factors contributing to the significant fluctuations seen in bonds along the far end of the yield curve.
The <a href="https://home.treasury.gov/news/press-releases/jy1864">report</a>, in essence, underscored the need for Treasury to maintain flexibility in its issuance strategy, citing examples to lay down the fiscal and economic backdrop. It reemphasized the importance of addressing factors like the global macroeconomic outlook, term premium and global monetary policy synchronization when evaluating demand for U.S. Treasuries. 
The Treasury Committee recommended considering increased issuance in more liquid parts of the yield curve and retaining flexibility with T-Bill share in the medium term. The report suggests no increase in 20-year issuance and a more modest increase in seven-year issuance relative to other tenors.
Read Next: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/10/35097916/yield-curve-inversion-may-not-predict-recession-but-analyst-says-too-early-to-decla">Yield Curve Inversion May Not Predict Recession, But Analyst Says Too Early To Declare &#8216;All Clear&#8217; On Downturn</a>
Photo via Shutterstock.

Government

Treasury's Refunding Statement Hints At Increased Issuance In More Liquid Parts Of Yield Curve

We performed a screening of large-cap ETFs, defined as having Assets Under Management (AUM) above $10 billion &#8211; to determine what funds had the largest positive and negative returns on the week, according to data from <a href="http://etfdb.com">etfdb.com</a>. Only non-leveraged funds were considered.
<h2 class="wp-block-heading">Winners</h2>
SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)
SPY added $502.21 million in net assets over the trailing week.
Launched in January 1993, SPY was the very first exchange-traded fund listed in the US. The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&amp;P 500 Index, a diversified large-cap U.S. index that holds companies across all eleven GICS sectors.
SPY has $401.56 billion in AUM and an expense ratio of 0.09%. The fund has holdings in 1000 companies, with the 10 largest comprising 39.34% of the fund.
The fund's largest holdings are Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) and Microsoft Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) making up 7.19% and 6.51% of the fund, respectively.
SPY lost $2.62 billion in net assets YTD.
SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>)
BIL was up $490.03 million in AUM on the week.
The SPDR Bloomberg 1-3 Month T-Bill ETF provides exposure to the ultrashort bond market.
The fund has $33.77 billion in AUM and an expense ratio of 0.14%.
YTD, BIL is up $7.65 billion in AUM.
<h2 class="wp-block-heading">Losers</h2>
iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>)
HYG lost $1.01 billion in net assets over the trailing week.
The iShares iBoxx $ High Yield Corporate Bond ETF offers exposure to a large swath of the dollar-denominated high-yield corporate bond market.
HYG has $12.94 billion in AUM and an expense ratio of 0.49%.
HYG has lost $3.67 billion in net assets YTD.
SPDR Gold Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>)
GLD lost $871.39 million in net assets over the trailing week.
SPDR Gold Shares provide exposure to gold without the need to personally own bullion. The price will move synchronously with the spot price of gold.
GLD has $51.48 billion in AUM and an expense ratio of 0.40%.&nbsp;
GLD lost $3.76 billion in net assets YTD.

AAPL

MSFT

Despite 3% Increase In Spot Price Of Gold, GLD Loses Close To A Billion In AUM - ETF Winners And Losers: Large-Cap Flows

In a world where cash is once again king, investors are turning their attention to cash-like funds and ETFs. One universe garnering notable interest is the U.S. Treasury market, where yields on short-term bonds have climbed to levels not seen <a href="https://www.benzinga.com/government/23/09/34488266/treasury-bills-at-5-yield-retail-investors-jump-on-the-risk-free-bandwagon">in nearly two decades.</a>
As of now, the annual yield on U.S. Treasury bonds, particularly those with maturities of up to two years, hovers around 5%. To put this into perspective, it&#8217;s the highest yield these securities have offered since June 2007 and is currently well above the latest annual inflation rate of 3.7%. 
What&#8217;s remarkable about this return is that it comes from one of the safest assets in the world — U.S. Treasury securities.
<h2 class="wp-block-heading">Why Short-Term Treasury ETFs Are The Safest Assets On The Planet</h2>
These bonds, which are issued by the federal government, are highly regarded for their safety due to the fact that they are backed by the unwavering trust and creditworthiness of the U.S. government. Regardless of the prevailing economic conditions, whether it be during a recession, periods of inflation, or even times of conflict, the U.S. government remains steadfast in fulfilling its commitments to bondholders.
The yields on the shorter end of the Treasury yield curve are often dubbed &#8220;risk-free.&#8221; This label stems from the clear-cut expectation that the U.S. government will fulfill its obligations upon maturity.
For non-U.S.-based investors, these short-term Treasury ETFs offer another perk. They provide exposure to the U.S. dollar, a primary safe-haven asset that tends to appreciate during liquidity crises and global risk-off periods.
Read Also: <a href="https://www.benzinga.com/markets/bonds/23/09/34327727/cash-is-king-5-bond-etfs-unlocking-attractive-returns-in-a-5-rate-world">Cash Is King: 5 Bond ETFs Unlocking Attractive Returns In A 5% Rate World</a>
But here&#8217;s where it gets interesting for income-seeking investors: dividends paid by bond ETFs, such as these Treasury-focused ones, translate into reliable and predictable monthly income.
While there are bond ETFs out there offering yields higher than 5%, they often lean towards high-yield corporate bonds or emerging market debt. While these can provide attractive yields, they might not provide the same level of security during times of global market turbulence.
In contrast, short-term Treasury ETFs maintain a stable annual yield of around 5% while serving as a protective cushion within a diversified portfolio. They act as a shield during bouts of heightened market volatility.
<h2 class="wp-block-heading">How To Generate A $500 Monthly Dividend With These 7 U.S. Treasury ETFs</h2>
Now, let&#8217;s delve into how an annual yield of 5% can generate a consistent monthly income of $500, thanks to these Treasury ETFs:
<ul>
<li>SPDR Bloomberg 3-12 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BILS#NYSE">BILS</a>): Priced at $99.13, it offers an indicative dividend yield of 4.58%. With a last reported dividend of $0.425, paid monthly, you&#8217;d need 1,177 shares, amounting to $116,676, to generate $500 per month.</li>
<li>iShares 0-3 Month Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SGOV#NYSE">SGOV</a>): Currently trading at $100.39, it yields 4.39%. Its last reported dividend was $0.412, also paid monthly. To secure $500 monthly, you&#8217;d require 1,214 shares, totaling $121,873.</li>
<li>SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>): Priced at $91.55, this ETF offers a 4.36% yield. Its most recent dividend amounted to $0.394, paid monthly. To achieve $500 per month, you&#8217;d need 1,270 shares, valued at $116,268.</li>
<li>US Treasury 2 Year Note ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UTWO#NYSE">UTWO</a>): With a price of $47.90, it boasts a 4.28% yield and a last dividend of $0.194, paid monthly. To secure $500 monthly, you&#8217;d require 2,578 shares, worth $123,486.</li>
<li>BondBloxx Bloomberg One Year Target Duration US Treasury ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XONE#NYSE">XONE</a>): Currently trading at $49.51, it yields 4.27% and recently paid a dividend of $0.199, on a monthly basis. To attain $500 per month, you&#8217;d need 2,513 shares, amounting to $124,418.</li>
<li>Goldman Sachs Access Treasury 0-1 Year ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GBIL#NYSE">GBIL</a>): Priced at $99.82, it boasts a 4.20% yield and a last dividend of $0.407, distributed monthly. To generate $500 monthly, you&#8217;d require 1,229 shares, totaling $122,678.</li>
<li>iShares Short Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SHV#NYSE">SHV</a>): Trading at $110.16, it offers a 4.18% yield, with a last dividend of $0.465, paid monthly. To achieve $500 per month, you&#8217;d need 1,076 shares, worth $118,532.</li>
</ul>
<figure class="wp-block-table"> 
<table>
<thead>
<tr>
<th>ETF</th>
<th>Price</th>
<th>Dividend Yield (Indicative)</th>
<th>Last Dividend Reported</th>
<th>Frequency</th>
<th>No. of ETF Shares To Buy</th>
<th>Amount needed to generate $500/m income</th>
</tr>
</thead>
<tbody>
<tr>
<td>SPDR Bloomberg 3-12 Month T-Bill ETF </td>
<td>$99.13</td>
<td>4.58%</td>
<td>$0.425</td>
<td>Monthly</td>
<td>1,177</td>
<td>$116,676</td>
</tr>
<tr>
<td>iShares 0-3 Month Treasury Bond ETF </td>
<td>$100.39</td>
<td>4.39%</td>
<td>$0.412</td>
<td>Monthly</td>
<td>1,214</td>
<td>$121,873</td>
</tr>
<tr>
<td>SPDR Bloomberg 1-3 Month T-Bill ETF </td>
<td>$91.55</td>
<td>4.36%</td>
<td>$0.394</td>
<td>Monthly</td>
<td>1,270</td>
<td>$116,268</td>
</tr>
<tr>
<td>US Treasury 2 Year Note ETF </td>
<td>$47.90</td>
<td>4.28%</td>
<td>$0.194</td>
<td>Monthly</td>
<td>2,578</td>
<td>$123,486</td>
</tr>
<tr>
<td>BondBloxx Bloomberg One Year Target Duration US Treasury ETF </td>
<td>$49.51</td>
<td>4.27%</td>
<td>$0.199</td>
<td>Monthly</td>
<td>2,513</td>
<td>$124,418</td>
</tr>
<tr>
<td>Goldman Sachs Access Treasury 0-1 Year ETF</td>
<td>$99.82</td>
<td>4.20%</td>
<td>$0.407</td>
<td>Monthly</td>
<td>1,229</td>
<td>$122,678</td>
</tr>
<tr>
<td>iShares Short Treasury Bond ETF </td>
<td>$110.16</td>
<td>4.18%</td>
<td>$0.465</td>
<td>Monthly</td>
<td>1,076</td>
<td>$118,532</td>
</tr>
</tbody>
</table>
</figure>
Read Now: <a href="https://www.benzinga.com/money/how-to-buy-treasury-bonds">How to Buy Treasury Bonds</a>
Photo: Shutterstock

Specialty ETFs

New ETFs

BILS

GBIL

SGOV

UTWO

XONE

How To Earn $500 Monthly Income With These Cash-Like Treasury ETFs

Ray Dalio, the billionaire hedge fund investor and founder of Bridgewater Associates LP, has taken a bold stance against the conventional <a href="https://www.benzinga.com/markets/bonds">wisdom of owning bonds.</a>
In an interview with <a href="https://www.bloomberg.com/news/articles/2023-09-14/ray-dalio-says-he-doesn-t-want-to-hold-bonds-cash-is-good?sref=TBDibEcD">Bloomberg</a> during the 10th Milken Institute Asia Summit in Singapore, he declared his aversion to debt, bonds, and their ilk. 
Instead, he&#8217;s betting big on something that might raise more than a few eyebrows in the current financial landscape: cold, hard cash.
<h2 class="wp-block-heading">Cash Is King </h2>
Dalio&#8217;s reluctance to embrace bonds underscores the growing complexity that investors face as global central banks grapple with the specter of inflation. He admitted that, for now, cash appears to be a prudent choice.
Cash-like instruments, particularly exchange-traded funds (ETFs) linked to Treasury bills or short-dated Treasury bonds, are experiencing a remarkable surge in demand. The SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) witnessed a staggering $2 billion inflow this month, while the iShares Trust 0-3 Month Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SGOV#NYSE">SGOV</a>) attracted $1.7 billion.
Chart: Treasury Bills Maturing Within 6 Months Break the 5% Yield Barrier
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="548" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/14151400/US01MY_2023-09-14_21-12-26_55a89-1024x548.png" alt="" class="wp-image-106284" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/14151400/US01MY_2023-09-14_21-12-26_55a89-1024x548.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/14151400/US01MY_2023-09-14_21-12-26_55a89-300x161.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/14151400/US01MY_2023-09-14_21-12-26_55a89-768x411.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/14151400/US01MY_2023-09-14_21-12-26_55a89-1536x822.png 1536w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/09/14151400/US01MY_2023-09-14_21-12-26_55a89.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h2 class="wp-block-heading">The Turning Point</h2>
Dalio&#8217;s concerns run deeper than a mere preference for cash. When probed about addressing the world&#8217;s mounting borrowings, he issued a stark warning. 
According to him, when debt becomes a significant portion of the economy, a troubling trend emerges where the situation tends to compound and accelerate. This ominous scenario is further exacerbated as interest payments burgeon. 
The billionaire investor asserted that the world is at a turning point of acceleration. As the U.S. grapples with a burgeoning deficit that necessitates selling bonds to global investors, a precarious balancing act ensues. Keeping interest rates at an attractive level for creditors while not burdening the issuer with excessive rates becomes an intricate dance. 
Dalio noted that when investors choose to sell, driving up yields, central banks face a critical decision—whether to print money and buy bonds, a move that can stoke inflation pressures, Bloomberg reported. 
He concluded that, in his view, bonds are not a good investment in the longer term.
Read now: <a href="https://www.benzinga.com/markets/bonds/23/09/34327727/cash-is-king-5-bond-etfs-unlocking-attractive-returns-in-a-5-rate-world">Cash Is King: 5 Bond ETFs Unlocking Attractive Returns In A 5% Rate World</a>
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: <a href="https://www.flickr.com/photos/websummit/" target="_blank" rel="noreferrer noopener">Web Summit</a>&nbsp;on Flickr

Billionaire Ray Dalio Shuns Bonds, Embraces Cash: What's Behind His Strategy?

Salman Ahmed, the global head of macro and strategic asset allocation at Fidelity International, stood firm in his anticipation of an impending recession, even as Wall Street appeared increasingly optimistic about the Federal Reserve&#8217;s potential to orchestrate a soft landing <a href="https://www.benzinga.com/topic/economics">for the U.S. economy.</a>
<h2 class="wp-block-heading">Corporate Debt Refinancing: A Time Bomb Ticking</h2>
Ahmed issued a stark warning about the forthcoming consequences of the central bank&#8217;s tightening of monetary policy, combined with the looming specter of an economic downturn, which he expected to become glaringly evident in 2024.
What&#8217;s causing this potential crisis? A wave of corporate debt refinancing scheduled to unfold over the next six months. 
Ahmed conveyed his concerns in an interview with <a href="https://www.bloomberg.com/news/articles/2023-09-01/fidelity-international-says-wall-of-corporate-debt-to-spark-recession-in-2024?srnd=premium&amp;sref=TBDibEcD">Bloomberg</a>, stating: &#8220;The endpoint of the cycle is recession because the transmission channel will kick in.&#8221;
He emphasized that if the Fed doesn&#8217;t ease off at some point, everyone will have to contend with higher real interest rates.
<h2 class="wp-block-heading">2024 Debt Maturity for U.S. Corporates: An Alarming Figure</h2>
In 2024, almost 9% of the outstanding investment-grade debt is poised to mature. Unless companies reduce their capital requirements, this debt will need to be rolled over at higher interest rates.
The elevated costs associated with servicing this debt typically constrict a company&#8217;s capacity to invest and remunerate its workforce. It is noteworthy that despite the current high stock valuations and narrow credit spreads, the impending downturn might not yet be fully factored into the financial markets. 
Ahmed highlights the magnitude of the challenge, stating, &#8220;A company which financed itself at 2, 3, 4% is going to be financing at 10, 11, 12% now. That&#8217;s a huge shock.&#8221;
<h2 class="wp-block-heading">Preparing for the Storm</h2>
In anticipation of the approaching surge in debt refinancing set to commence in early 2024, Fidelity International adjusted its cash weighting, shifting it to overweight — a notable departure from its neutral position over the preceding two months. 
Cash-like ETFs, such as the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) and the iShares 0-3 Month Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SGOV#NYSE">SGOV</a>), saw a sharp influx<a href="https://www.benzinga.com/markets/bonds/23/08/34157617/investors-bet-7b-on-ultra-short-term-bond-etfs-chase-5-returns-amid-market-volatility"> of money in August. </a>
The firm maintained a cautious stance on stocks, displaying a preference for investment-grade credit — as tracked by the iShares iBoxx $ Inv Grade Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LQD#NYSE">LQD</a>) — over high-yield credit. Additionally, the company realigned its overweight position on government bonds to neutral for the month of September.
While the resilience of the American economy in the face of rising interest rates led Ahmed to revise his recession projection to the following year and decrease the likelihood from 80% to 60%, he remains convinced that an economic downturn remains an unavoidable eventuality.
His perspective aligned with a recent study conducted by Federal Reserve officials, which indicated it typically takes approximately a year for companies to experience the full impact of prior interest rate hikes, irrespective of future adjustments.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Shutterstock

Why A Corporate Debt's Ticking Time Bomb Could Make A 2024 Recession Inevitable, Analyst Warns

August&#8217;s unpredictable market swings have led investors to seek solace in cash-equivalent ETFs, marking the most significant <a href="https://www.benzinga.com/etfs">influx in recent months.</a>
<h3 class="wp-block-heading">Billions Flow into Ultra-Short Bond ETFs</h3>
Investors have funneled a whopping $7 billion into ultra-short bond ETFs in August, as per <a href="https://www.bloomberg.com/news/articles/2023-08-31/cash-like-etfs-lure-billions-as-traders-shelter-from-volatility?srnd=premium&amp;sref=TBDibEcD">Bloomberg </a>Intelligence data. 
A significant chunk, over $2 billion, found its way to the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>), marking a turnaround from the previous four months of capital flight.
<h3 class="wp-block-heading">Why the Sudden Appeal?</h3>
ETFs boasting short-term Treasury securities with returns exceeding 5% have become the sanctuary for investors, shielding them from the volatile movements of both stocks and bonds. Despite a recent dip in Treasury yields, they soared to their highest levels since 2007 earlier this month. This spike, driven by fears of persistent aggressive monetary policies and a supply surge, subsequently weighed down equities.
With these dynamics at play, August is shaping up to witness the most substantial inflows into cash-equivalent bond ETFs since the chilly month of February. Coincidentally, the S&amp;P 500, as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) is also bracing for its initial monthly decline since that time.
While the SPDR Bloomberg 1-3 Month T-Bill ETF has been a favorite, other funds like the iShares 0-3 Month Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SGOV#NYSE">SGOV</a>) have seen nearly $2 billion in inflows. Meanwhile, the Goldman Sachs Access Treasury 0-1 Year ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GBIL#NYSE">GBIL</a>) and the iShares Short Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SHV#NYSE">SHV</a>) have attracted over $500 million and $400 million, respectively.
Table: Ultra-Short Term Treasury Bond ETFs 
<figure class="wp-block-table"> 
<table>
<thead>
<tr>
<th>ETF</th>
<th>TICKER</th>
<th>AUM ($bn)</th>
<th>Fund Flows (August) ($bn)</th>
</tr>
</thead>
<tbody>
<tr>
<td>SPDR Bloomberg 1-3 Month T-Bill ETF</td>
<td>BIL</td>
<td>29.8</td>
<td>2.3</td>
</tr>
<tr>
<td>iShares 0-3 Month Treasury Bond ETF</td>
<td>SGOV</td>
<td>14.02</td>
<td>1.97</td>
</tr>
<tr>
<td>Goldman Sachs Access Treasury 0-1 Year ETF</td>
<td>GBIL</td>
<td>5.97</td>
<td>0.512</td>
</tr>
<tr>
<td>iShares Short Treasury Bond ETF</td>
<td>SHV</td>
<td>20.4</td>
<td>0.470</td>
</tr>
<tr>
<td>SPDR Bloomberg 3-12 Month T-Bill ETF</td>
<td>ARCA: BILS</td>
<td>2.52</td>
<td>0.149</td>
</tr>
<tr>
<td>SPDR Portfolio Short Term Treasury ETF</td>
<td>ARCA: SPTS</td>
<td>5.4</td>
<td>0.097</td>
</tr>
</tbody>
</table>
</figure>
Chart: 6-Month Treasury Bill Yields Are At The Highest In Over Two Decades
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="598" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/31153250/US06MY_2023-08-31_21-32-03_4992d-1024x598.png" alt="" class="wp-image-98283" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/31153250/US06MY_2023-08-31_21-32-03_4992d-1024x598.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/31153250/US06MY_2023-08-31_21-32-03_4992d-300x175.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/31153250/US06MY_2023-08-31_21-32-03_4992d-768x448.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/31153250/US06MY_2023-08-31_21-32-03_4992d-1536x897.png 1536w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/31153250/US06MY_2023-08-31_21-32-03_4992d.png 1850w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Shutterstock

Investors Bet $7B On Ultra-Short Term Bond ETFs, Chase 5% Returns Amid Market Volatility

President Joe&nbsp;Biden and House Speaker Kevin&nbsp;McCarthy struck a preliminary agreement on the debt ceiling over the weekend, dubbed the &quot;Fiscal Responsibility Act,&quot; which suspends the debt limit until 2025 and limits discretionary <a href="https://www.benzinga.com/topic/debt-ceiling">spending for the next two years.</a>
Negotiating teams from the White House and the Republican Party are currently completing the legislative text, which must be accepted by both houses of Congress in order to be adopted.
Since the Biden-McCarthy agreement was announced, the default-sensitive 1-month T-Bill yield has dropped over 40 basis points to 5.3%, indicating investors&#39; confidence that the debt ceiling package would pass. Short-term U.S. T-Bills are tracked by the SPDR Bloomberg 1-3 Month T-Bill ETF (ARCA: BIL).
Read also:&nbsp;<a href="https://www.benzinga.com/news/23/05/32617728/why-larry-summers-says-debt-ceiling-deals-irs-provisions-are-a-grave-error-desperately-hope-it-will" target="_blank">Why Larry Summers Says Debt Ceiling Deal&#39;s IRS Provisions Are A &#39;Grave&#39; Error: &#39;Desperately Hope It Will Not Set A Precedent&#39;</a>
Here are the critical stages and votes involving the debt limit agreement that must&nbsp;take place in the coming days to avoid a U.S. default on June 5:
1) Clearing The House Rules Committee
The House Rules Committee, which is set to make a decision on Tuesday at 3 p.m. ET, is the first barrier before the debt-ceiling vote moves to the House floor.&nbsp;
The panel&nbsp;is made up of nine Republicans and four Democrats, with two ultra-conservative Republicans &ndash; Rep.&nbsp;Chip Roy (R-TX) and Rep. Ralph Norman (R-SC) &ndash;&nbsp;expected to reject the proposal and a third &ndash; Rep.&nbsp;Thomas Massie (R-KY)&nbsp;&ndash;&nbsp;still&nbsp;unsure. A majority vote is required for the measure to clear&nbsp;the Rules Committee; if all three Republicans vote against it and no Democrats support the proposal, the bill will not reach the House floor.
It is unusual&nbsp;for the minority party to assist the majority party&#39;s initiatives in the Rules Committee.
&ldquo;We should kill this. We should move forward. We should pass a short-term debt ceiling change&hellip;let&#39;s do it right, let&#39;s not lift the debt $4 trillion,&rdquo; Roy told Fox News on Monday.&nbsp;
Goldman Sachs&#39; analyst Alec Phillips believes the Rules Committee will be able to move the measure to the House Floor because a majority of the committee will vote in favor of the package.
2) Vote In The House
If the text regarding the debt ceiling is approved by the Rules Committee, the House can proceed to a vote on it the following day, June 1.
Both Biden and McCarthy expressed confidence in the House backing the bill, although some congressional&nbsp;Republicans, including Rep.&nbsp;Matt Rosendale (R-MT), have already expressed their intention to vote no. Still, a large&nbsp;majority of Congress&nbsp;seems&nbsp;to be on board, as Goldman Sachs believes &quot;a failed vote in the House is very unlikely.&quot;&nbsp;
3) Vote In The Senate
After being approved by the House, the bill will go to the Senate, which is controlled by Democrats.&nbsp;Here, the obstacles&nbsp;involve time constraints.&nbsp;
Senator Majority Leader&nbsp;Chuck Schumer (D-NY) advised senators on Sunday that &quot;due to the time it may take to process the legislation in the Senate without cooperation, Senators should prepare for potential Friday and weekend votes.&quot;
Once the Senate has&nbsp;voted on the plan, the debt-ceiling measure will go to President Joe Biden for his signature.
Read now:&nbsp;<a href="https://www.benzinga.com/news/23/05/32618783/t-bill-deluge-ahead-why-this-portfolio-manager-thinks-us-could-have-its-own-bank-of-england-moment" target="_blank">T-Bill Deluge Ahead? Why This Portfolio Manager Thinks US Could Have Its Own Bank Of England Moment</a>
Photo: Shutterstock

Politics

General

Debt Ceiling Deal: Mapping The Key Steps To 'Fiscal Responsibility Act' Approval

Negotiations to raise the U.S. federal debt ceiling met fresh snags after the White House presented congressional Republican leaders with a list of proposals to reduce the deficit by closing tax loopholes on Monday, which were universally rejected by the GOP. President Joe Biden will meet with key congressional representatives Tuesday to discuss the debt ceiling, after he&nbsp;told Reuters on Sunday he was optimistic about a <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/05/32401334/biden-optimistic-about-debt-ceiling-deal-ahead-of-key-tuesday-meeting-but-republica" target="_blank">deal before the deadline.</a>
According to unnamed sources consulted by the Washington Post, senior White House officials pitched a dozen tax schemes to decrease the deficit, as part of a wider agreement with House Republicans last week,&nbsp;including one aimed at crypto&nbsp;transactions and another for major real estate investors.&nbsp;
The Republican rejection of the White House plans indicates that congressional Republicans are focused on spending cuts over tax hikes in order to reduce the U.S. deficit.&nbsp;Rep. Dusty Johnson (R-SD)&nbsp;has previously stated that any tax increase would be a &quot;red line&quot; not to cross&nbsp;in debt ceiling&nbsp;talks.
The deadline for raising the nation&#39;s spending ceiling comes in early June, and lawmakers have only a few weeks to do so.
Read also:&nbsp;<a href="https://www.benzinga.com/news/23/05/32382960/peter-schiff-predicts-dire-consequences-debt-default-or-massive-inflation-inevitable" target="_blank">Peter Schiff Predicts Dire Consequences: Debt Default Or Massive Inflation Inevitable</a>
Investors Are Getting Jittery Over Debt-Ceiling Talks
So far, the discussion of the debt ceiling has only marginally weighed on the stock market, while some detrimental effects are starting to become increasingly evident in the Treasury market.
The yield on the one-month Treasury note, a measure of market anxiety over the debt ceiling deal, increased by a full percentage point to 5.6% in May, hitting&nbsp;the highest level&nbsp;since data began in 2002.&nbsp;
On Monday, the bond market&#39;s proxy for raising the debt ceiling declined by 8 basis points, indicating a minor improvement in market sentiment following Biden&#39;s remarks.
The SPDR Bloomberg 1-3 Month T-Bill ETF (ARCA: BIL) is the most popular exchange-traded fund (ETF) that invests in U.S. Treasury bills with maturities of one to three months.
Chart: One-Month Treasury Bill Yield Spiked In May On Debt-Ceiling Frenzy
<img alt="" src="https://www.benzinga.com/files/u1363475/us01my_2023-05-15_20-19-55_510a1.png" style="height:500px; width:100%" />
Photo: Shutterstock

GOP Shoots Down Biden's Tax Proposals As Debt Ceiling Deadline Nears

The U.S. Treasury yield curve entered an unprecedented state&nbsp;this week, with one-month yields rising&nbsp;above three-month yields for the first time since the subprime mortgage crisis, due to investors&#39; mounting concern about the <a href="https://www.benzinga.com/government/23/05/32302154/what-is-the-debt-ceiling-and-what-happens-if-congress-cant-raise-it-in-time" target="_blank">U.S. debt ceiling situation.&nbsp;</a>
The yield differential between one-month and three-month Treasury bills widened to more than 30 basis points on Thursday, the largest ever recorded since early 2008. Over the past two weeks, one-month yields have risen by nearly 2 percentage points from 3.5% to 5.5%.&nbsp;
The yield curve in the United States is now completely&nbsp;inverted between one month and five years, which is often seen by the market&nbsp;as a condition of danger that the debtor would be unable to meet its obligations in the near future.
Read more:&nbsp;<a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32321261/unraveling-treasury-yield-curve-5-charts-depicting-haywire-shifts-in-the-debt-cei" target="_blank">Unraveling Treasury Yield Curve: 5 Charts Depicting Haywire Shifts In The Debt-Ceiling Crisis</a> 
Chart: 1-Month T-Bill Yield&nbsp;vs. 3-Month T-Bill Yield
<img alt="" src="https://www.benzinga.com/files/u1363475/us01my-us03my_2023-05-11_12-53-46_a59f0.png" style="height:500px; width:100%" />
3-Month Versus 10-Year Yield Spread Indicates A Recession Is Just Around The Corner
Furthermore, the 3-month to 10-year yield spread increased to 1.84%, the highest recorded since 1983, reflecting mounting market fears about an impending recession. 
The 3-month versus 10-year yield&nbsp;gap is being used as a gauge by the New York Fed&#39;s recession risk tracker, which now indicates a 68% likelihood of a recession developing within the next twelve months.
Chart: NY Fed&#39;s Twelve-Month Ahead Recession Probability
<img alt="" src="https://www.benzinga.com/files/u1363475/screenshot_2023-05-11_alle_14.27.32.png" style="height:500px; width:100%" /> 
Bond&nbsp;Investors Are Betting Big That The Fed Will Cut Interest Rates Soon
Bond investors currently hold the strongest conviction since November 2007 that the Fed will be compelled to reduce interest rates significantly and swiftly in the near future.
The 2-year Treasury yield, a crucial proxy for assessing market expectations&nbsp;on the Fed&#39;s short-term&nbsp;interest&nbsp;rate, fell to 3.83% on Thursday, moving around 1.4% below the current level of the Fed funds rate.
Such a level of negative spread between 2-year yields and the Fed funds rate, typically implies traders wagering heavily on Fed interest rate cuts to foster a recovery when a&nbsp;recession hits.
Chart: 2-Year Yields vs. Fed Funds Rate&nbsp;
<img alt="" src="https://www.benzinga.com/files/u1363475/us02y-usintr_2023-05-11_14-31-07_d9f77.png" style="height:500px; width:100%" />
Most-Traded Exchange Traded Funds (ETFs) Investing In&nbsp;US Treasuries:&nbsp;
<ul>
<li>SPDR Bloomberg 1-3 Month T-Bill ETF (ARCA: BIL)</li>
<li>SPDR Bloomberg 3-12&nbsp;Month T-Bill ETF&nbsp;(ARCA: BILS)</li>
<li>iShares 1-3 Year Treasury Bond ETF (NASDAQ: <a href="https://www.benzinga.com/stock/shy#NASDAQ">SHY</a>)</li>
<li>iShares 7-10&nbsp;Year Treasury Bond ETF (NASDAQ: <a href="https://www.benzinga.com/stock/ief#NASDAQ">IEF</a>)</li>
<li>iShares 20+&nbsp;Year Treasury Bond ETF (NASDAQ: <a href="https://www.benzinga.com/stock/tlt#NASDAQ">TLT</a>)</li>
</ul>
Now read: <a href="https://www.benzinga.com/government/23/05/32324212/biden-condemns-gop-for-holding-the-economy-hostage-amid-debt-ceiling-crisis-says-us-default-not-an-o" target="_blank">Biden Condemns GOP For &#39;Holding The Economy Hostage&#39; Amid Debt Ceiling Crisis, Says US Default Not An Option</a>
Photo: Shutterstock

GOVT

3 Alarming Charts: US Yield Curve Mirrors 2008 Subprime Crisis As Default, Recession Worries Mount

U.S. Treasury bills, also considered&nbsp;the world&#39;s&nbsp;safest asset, are having a deeply negative trading session&nbsp;on Tuesday, May 2,&nbsp;as the yield on the three-month T-Bill skyrocketed&nbsp;18 basis points to 5.23% amid growing concerns that<a href="https://www.benzinga.com/government/23/05/32138487/janet-yellen-warns-the-us-government-could-run-out-of-money-june-1-calls-on-congress-to-raise-debt-l" target="_blank">&nbsp;the U.S. government will run&nbsp;out of cash by June.&nbsp;</a>
At the same time, the cost of insuring against a U.S. debt default, as measured by the 5-year credit-default swap, rose to over 60 basis points, the highest level since March 2009.&nbsp;
Treasury Secretary Janet Yellen expressed concern that the government may run out of money before the beginning of June, and President Joe Biden called a meeting of lawmakers&nbsp;on May 9 to discuss increasing the debt ceiling.
The White House has stated that it will not negotiate with Republicans over the extension of the debt ceiling, while House Speaker Kevin McCarthy has pledged not to raise the ceiling&nbsp;without consistent budget cuts.&nbsp;McCarthy agreed to attend the May 9 meeting after speaking with Biden, a GOP aide said Tuesday.
Read also:&nbsp;<a href="https://www.benzinga.com/money/how-to-buy-treasury-bonds" target="_blank">How to Buy Treasury Bonds</a>
Jan Hatzius, an economist at Goldman Sachs, previously believed that the U.S. Treasury would be able to meet its obligations until late July, under&nbsp;the debt ceiling. The new early deadline is not surprising, according to the expert, given that the Treasury&#39;s cash balance forecasts might fall as low as $25-30 billion in early June, which is typically the lowest cash level the Treasury generally uses to project its deadline. A short-term extension with parties then continuing to negotiate is now the most likely scenario, according to Goldman Sachs.&nbsp;
Tensions Mount&nbsp;On Short-Dated Treasuries&nbsp;
Despite the fact that yield levels are still a long way from pricing in the prospect of a U.S.&nbsp;default, investors are exhibiting the first signs of anxiety in the Treasury market.&nbsp;
The SPDR Bloomberg 1-3 Month T-Bill ETF (ARCA: BIL) is having volatile days, but the tension&nbsp;is spreading to short-dated notes as well. On Monday, the iShares 1-3 Year Treasury ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/shy#NASDAQ">SHY</a>) lost 0.45%, marking the worst trading day since June 2022.
At the time of writing, the three-month Treasury bill yield was 5.23%, the highest level since January 2001, and more than 110 basis points higher than the two-year yield.&nbsp;
Chart: 3-Month T-Bill Rose to Over 20-Year Highs
<img alt="" src="https://www.benzinga.com/files/u1363475/us03my_2023-05-02_13-30-31_c0e97.png" style="height:500px; width:100%" />
Read now:&nbsp;<a href="https://www.benzinga.com/government/23/04/32075002/debt-ceiling-crisis-mccarthy-says-biden-putting-american-economy-in-jeopardy-by-not-doing-anything" target="_blank">Debt Ceiling Crisis: McCarthy Says Biden Putting American Economy In Jeopardy &#39;By Not Doing Anything&#39;</a>

US T-Bill Yields Surge As Debt-Ceiling Concerns Fuel Investor Anxiety, Default Insurance Costs Reach 2009 Highs

The likelihood of a recession in the United States within the next year has risen to almost 58%, the highest level since August 1982,&nbsp;according to the <a href="https://www.benzinga.com/topic/federal-reserve-bank-of-new-york" target="_blank">New York Federal Reserve</a>.&nbsp;
The recession-risk indicator is now greater than it was in November 2007, just before the subprime-Lehman crisis, when it stood at 40%, and December 2001, when it was at 46%.
Chart: Probability of U.S. Recession Twelve Month Ahead
<img alt="" src="https://www.benzinga.com/files/u1363475/screenshot_2023-04-19_alle_14.54.03_0.png" style="height:400px; width:100%" />
Source: Federal Reserve Bank of New York
Read Also:&nbsp;<a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/04/31811631/economist-lists-3-recession-red-flags-investors-should-be-watching-in-2023" target="_blank">Economist Lists 3 Recession Red Flags Investors Should Be Watching In 2023</a>
The Bond Yield Curve Slope As Recession Predictor&nbsp;
The New York Federal Reserve&#39;s model uses the yield curve&#39;s slope, or &quot;term spread,&quot; to predict a U.S. recession twelve months ahead. The term spread used by the New York&nbsp;Fed refers to the gap in yields between&nbsp;the 10-year Treasury bond and the 3-month bill.
When yields on shorter-term bonds are higher than yields on longer-term bonds, the yield curve is considered&nbsp;inverted.&nbsp;
An inverted yield curve has reliably predicted each of the previous eight U.S. recessions since 1970.
Chart: Treasury Yield Curve&nbsp;Slope 10y Bond Yield&nbsp;Minus 3-Month Bill Yield; Shaded Areas&nbsp;Indicate U.S. Recessions<img alt="" src="https://www.benzinga.com/files/u1363475/screenshot_2023-04-19_alle_15.03.23.png" style="font-size:13px; height:400px; width:100%" />Source: Federal Reserve Bank of New York
Why Does an Inverted Yield Curve Indicate a Recession? 
When a yield curve is inverted, investors fear&nbsp;that the current high level of interest rates, reflected in elevated shorter-term yields, will push the economy into a recession, causing the central bank to cut interest rates in the future, thus discounting presently lower longer-term yields. This is why an inverted yield curve is often a precursor to a recession.
The SPDR Bloomberg 1-3 Month T-Bill ETF (ARCA: BIL), is a popular ETF which offers exposure to the ultrashort end of the Treasury&nbsp;curve, investing in zero coupon U.S. T-Bills with less than three months until maturity.
The&nbsp;iShares 7-10 Year Treasury Bond ETF&nbsp;(ARCA: IEF), instead offers exposure to Treasury bonds&nbsp;with seven to 10 years to maturity.&nbsp;
Treasury Yield Curve Inversion: Where Are We Now?
In March, the term spread was negative 1.15%, as&nbsp;10-year rates were&nbsp;around 3.5% and 3-month yields were&nbsp;around 4.65%. The 10-year-3-month yield differential has further&nbsp;worsened to a negative 1.6% at the time of writing, with the 3-month yield jumping to 5.2% and the 10-year yield trading at 3.6%.
If such a spread&nbsp;holds or expands further in April, then the next month&#39;s&nbsp;New York Fed&nbsp;recession probability indicator will likely become even&nbsp;more negative than its previous assessment of a 57.8% chance of a recession occurring before March 2024.
<img alt="" src="https://www.benzinga.com/files/u1363475/t10y3m_2023-04-19_15-13-07_b20dc.png" style="height:500px; width:100%" />
Now Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/04/31889290/bofa-fund-manager-survey-investors-underweight-in-stocks-reaches-2009-crisis-levels">BofA Fund Manager Survey: Investors Underweight In Stocks Reaches 2009 Crisis Levels</a>
Photo: Shutterstock

Economic Alarm Bells: A Recession Indicator Just Hit Levels Not Seen Since 1982

Yields on U.S. Treasury notes have been rising consistently throughout February, putting stock prices on the line.
The 10-year treasury bond came a hair&#8217;s breadth away from reaching the psychological mark of 4% on Wednesday, at 3.95%. Currently, yields stand at 3.92%.
High yields on treasury bonds normally pose a risk for stock prices, as investing in a risk-free asset like a fixed rate bond can become more attractive than equities, provided yields are high enough.
Related: <a href="https://www.benzinga.com/markets/22/09/28939183/does-it-even-make-sense-to-own-stocks-as-a-risk-free-4-siren-calls-your-name">Does It Even Make Sense To Own Stocks With Treasury Yields At 4%?</a>
Yields on the 10-year treasury note dropped slightly on Wednesday after the minutes from the latest FOMC <a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/23/02/31014358/fed-minutes-show-a-few-participants-favored-0-5-hike-inflation-still-remains-unaccepta">meeting were released.</a>
Still, Wednesday's yields were the highest they&#8217;d been since November 2022, when they marked their highest point in over 14 years (since 2008). Yields on the 2-year treasury note are 4.6% at the time of writing and peaked at 4.72% on Tuesday.
Bloomberg <a href="https://www.bloomberg.com/news/articles/2023-02-22/etf-traders-ditch-risk-assets-en-masse-pile-billions-into-bonds?sref=TBDibEcD#xj4y7vzkg">reported</a> an inflow into government bond ETFs of at least $2 billion on Wednesday.&nbsp;
The SPDR Portfolio Short Term Treasury ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPTS#NYSE">SPTS</a>) gained $908 million Wednesday morning, its biggest influx of funds in three years, according to the outlet. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) and the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) also received inflows of hundreds of millions.
ETFs following the S&amp;P 500 on the other hand, lost billions. At least $1.1 billion were withdrawn from each the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>).
Investors also dropped corporate bond ETFs like the SPDR Bloomberg High Yield Bond ETF (ACRA:JNK), which lost $1 billion in outflows.
Fixed-rate bonds tend to drop in price with rising interest rates, bringing their yields up. This makes the prospect of further hikes of the federal funds rate a good thesis for investing in government bonds. 
This idea is further supported by the fact that more monetary tightening by the Fed should have a negative impact on economic growth, causing company stock prices to head lower.
Now Read: <a href="https://www.benzinga.com/economics/macro-economic-events/23/02/31008742/soft-landing-or-recession-this-expert-explains-why-bears-expecting-an-imminent-cr">Soft Landing Or Recession? This Expert Explains Why Bears Expecting An Imminent Crash May Be Wrong</a>
Photo via Shutterstock.

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