A vaccine rally along with the markets digesting a Joe Biden presidency should continue to feed into a volatile week ahead for not just equities, but also safe haven bonds like Treasuries. That said, if bulls sense that Treasury yields will fall and prices will subsequently rise, then your play should be Direxion Daily 7-10 Year Treasury Bull 3X Shares (NYSEArca: TYD).
The fund seeks daily investment results, before fees and expenses, of 300% of the daily performance of the ICE U.S. Treasury 7-10 Year Bond Index. The index is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than seven years and less than or equal to ten years.
Of course, if you’re on the other side of the fence with the other bears, you may want to give Direxion Daily 7-10 Year Treasury Bear 3X Shares (NYSEArca: TYO) a look. TYO seeks daily investment results before fees and expenses of 300% of the inverse (or opposite) of the daily performance of the ICE U.S. Treasury 7-10 Year Bond Index.
The index is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than seven years and less than or equal to ten years. TYO is the ideal play if yields continue to climb as they did during Monday’s trading session.
As a CNBC report noted, “the jump in yields came after U.S. pharmaceutical giant Pfizer and German biotech firm BioNTech announced Monday their coronavirus vaccine was more than 90% effective in preventing Covid-19 among those without evidence of prior infection.”
COVID-19 continues to be a wild card in the markets, and that should keep traders on their feet moving forward as vaccine news continues to permeate the markets.
“The result was much better than the market was hoping for,” the report added. “White House coronavirus advisor Dr. Anthony Fauci has previously said one that is 50% or 60% effective would be acceptable. The news came as cases of the coronavirus continue to surge in the U.S., with daily infections reaching a record of 128,412 on Saturday, according to data compiled by Johns Hopkins University.”
“As stock markets rally around the world on the news, bond markets will sell off, driving yields higher and that will cause a repricing across all asset classes,” Chris Zaccarelli, Chief Investment Officer at Independent Advisor Alliance, said in a note.
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