The Two-Year Reaches Its Highest Yield Since 2007

The stock market is having a good day so far. At noon, the S&P 500 is up about 0.5%. Earlier, it was up over 1%.

The yield on the two-year Treasury reached 4.857%. That’s its highest level in nearly 16 years.

Our Buy List is outpacing the market by a small amount so far today. Some of our leaders today are Trex (TREX), Middleby (MIDD) and Polaris (PII). Those are all cyclical stocks. Trex and Celanese (CE) will report after today’s close.

This morning we got the report on orders for durable goods. The headline number was very bad. Orders for durable goods plunged by 4.5%, but that drop was almost all due to Boeing. In December, Boeing got a surge in orders so that led to a slow January.

Airplane orders can be very volatile. If we exclude transportation, then orders were up by 0.7%.

From MarketWatch:

More important, business investment climbed 0.8% to mark the fastest gain since last August. Investment had declined in three of the last four months of 2022.

Still, the annual rate of growth in business investment slowed again to 4.3% from 5% — less than half the pace compared with one year ago.

These orders exclude military spending and the auto and aerospace industries.

Finally some good news for housing. This morning, the National Association of Realtors said that pending home sales rose by 8.1% last month. That’s the largest increase since June 2020.

Even with that increase, over the past year, pending sales are down more than 24%. From Bloomberg, “The jump beat all estimates in a Bloomberg survey of economists, which called for a 1% advance.”

Shares of Union Pacific are up about 10% on news that the CEO is stepping down. If the news of you leaving your job adds $11 billion in market value, then it probably wasn’t meant to be.

Posted by on February 27th, 2023 at 12:12 pm


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