On Thursday, the U.S. 10-year Treasury constant maturity rate reached near a seven-year high of 3.20%, sending the Dow tumbling over 200 points during the first hour of trading.
CNBC columnists Fred Imbert and Alexandra Gibbs said interest-rate sensitive stocks like Proctor & Gamble Co. PG declined while bank stocks like JPMorgan Chase & Co. JPM, Bank of America Corp. BAC and Citigroup Inc. C profited from the rising interest rates.
Dow's rally set to pause from CNBC.
GuruFocus’ Treasury Yield Curve now shows spread between 10-year and two-year Treasury yields
GuruFocus launched the “Treasury Yield Curve” page in February. The page first illustrates the current yield curve and the historical spread between the 10-year Treasury yield and the one-year Treasury yield. Figure 1 illustrates the two charts.
Figure 1
The website now also illustrates the historical spread between the 10-year Treasury yield and the two-year Treasury yield. Figure 2 shows a sample chart.
Figure 2
As Figures 1 and 2 illustrate, the spread between the 10-year yield and the short-term yield has declined over the past five years.
See also
Berkshire Hathaway Inc. BRK.ABRK.B co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio) reiterated four key investing criteria for “wonderful companies at fair prices”: predictable earnings, strong and improving profit margins, little debt while growing business, and available at attractive prices. Such companies meet criteria like the ones below:
- A GuruFocus business predictability rank of at least four stars.
- Positive five-year operating margin growth.
- Five-year long-term debt to revenue growth at most 5%.
- Price-earnings to growth ratio at most 2.
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Disclosure: no positions.
