The FOMC, Bank of England, and the European Central Bank all meet this week, which may make jittery bond holders even more nervous. In addition, as I outlined in the Week Ahead column there is a full slate of economic data that could also move rates.
Many bond holders are likely dreading their July portfolio statements as many who bought bond funds were focused only on safety and yield. The prospect of significant capital losses was not a concern then, but is now a real problem now for many.
The weekly bottom formation in T-bond yields outlined in the premier Eyes on Income column was completed before the end of May and pointed to higher yields. This formation took over 16 months to develop so rates could move higher for some time.
Of course markets and rates do not move straight up or straight down. There were signs in late June that rates had formed a short-term top but last week rates spiked so the yield on the 10-year T-note is still in its trading range. But this does not mean income investors should not take action, and there is one stock that I think should be added to the current Eyes on Income portfolio.
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