Listen to the audio version of this article (generated by AI).
Why $6 billion couldn’t calm the bond market… the 10-year’s 5% line in the sand … a “Forever Stock” for a jittery market … how Jonathan Rose’s subscribers just made 65% in two weeks
Yesterday, the Treasury pulled out its biggest weapon yet – and the bond market rejected it.
Secretary Scott Bessent announced it would buy back $6 billion in longer-dated debt. That’s triple the size of a normal buyback operation, and it capped weeks of Bessent talking tough about the long end of the yield curve.
But immediately following yesterday’s announcement, the 10-year Treasury yield climbed anyway – to 4.84%, its highest level since 2023.
It didn’t stop there…
As I write on Thursday morning, the 10-year yield has jumped to 4.92% – dangerously close to a critical “5%” line-in-the-sand that we’ll discuss momentarily.
That reaction is the whole story. So, let’s unpack what it’s telling us – and what it means for your portfolio.
The 10-year yield is arguably the most important number in finance
It’s the rate sitting underneath every stock valuation, every mortgage, and every corporate loan. When it rises, the math on future earnings gets punished – so, the higher it climbs, the harder it presses down on stock prices. That’s why a surging 10-year keeps investors up at night.
So, why has it been marching higher?
In short, because inflation won’t go away, the war in the Middle East won’t end, Federal Reserve Chair Kevin Warsh won’t signal rate cuts, and the U.S. government won’t stop flooding the market with more bonds than buyers want to absorb. We’ve walked through all of this in recent Digests. The pressure has been building for months.
This morning brought the latest examples of these overhangs. The Producer Price Index – a measure of wholesale price inflation – clocked in at 5.4% year-over-year. That was higher than the estimate and miles above the Fed’s 2% goal.
Meanwhile, oil prices continued to climb amid reports of escalation in the Middle East. Brent trades at nearly $105 a barrel and West Texas Intermediate is on the verge of pushing north of $100.
Which circles us to Luke Lango’s line in the sand…
As we’ve covered here in the Digest, Luke, our technology investing expert, has been clear about the level that decides whether this AI bull market lives or dies: 5% on the 10-year.
Below it, the market survives on earnings strength. Above it, everything changes.
As I write, we’re just 8 basis points from everything changing…
A sustained break above 5%, he warns, and the bruised consumer becomes a broken one – dragging down Big Tech’s revenues and the AI capex those revenues fund.
Now, here’s the most troubling part: this spike occurred despite the Treasury’s largest buyback yet. That’s the market sending a message – not “we wanted a bigger buyback,” but rather, “you’re using the wrong tool.”
Here’s Luke’s take. From yesterday’s Early Stage Investor Daily Notes:
That tells us Treasury operations alone cannot solve this problem.
Bessent can slow the move and reduce volatility, but the underlying pressure – especially the oil shock – has to ease before long-term yields can come down in a meaningful way.
In a recent Digest, we featured analysis from Tom Yeung, Eric Fry’s right-hand man at Fry’s Investment Report. He explained how a buyback doesn’t retire a single dollar of debt – it just swaps long-term paper for short-term paper “without reducing what’s actually owed” (which is now north of $40 trillion). The market knows this – and isn’t pleased.
So, in the wake of Bessent’s buyback announcement yesterday, the deficit is untouched. Inflation is untouched. The war is untouched. And Warsh is untouched. This is why bond investors looked at $6 billion in buybacks and shrugged.
This climbing 10-year yield is the single biggest variable hanging over the market right now. The question is whether it’ll pierce 5% and drag the market down with it.
We’ll keep tracking that line in the days ahead.
Before we shift gears away from Luke, a quick note on last night…
As we’ve been covering in the Digest over the last week, Luke has spent months researching Elon Musk’s suppliers.
Between Tesla (TSLA), SpaceX (SPCX), xAI and X, Musk is assembling what Luke calls a “Vertical AI” empire – and Luke wants to know which small companies Musk will need to buy key components from as he builds that empire.
Here’s Luke:
At last night’s event, Louis Navellier, Eric Fry, and myself connected four layers of [Musk’s Vertical AI Masterplan] – data, computing power, connectivity, and robotics – and explained why we are targeting the specialized suppliers behind Musk’s ambitions.
I also introduced a brand-new report, , which details supplier recommendations, tickers, and buy-up-to prices, alongside a blueprint showing where those companies fit.
. If you’re looking for which companies will benefit most as Musk continues to build his empire, it’s a must-watch.
Now, circling back to today’s volatility, how do you stay invested through a market this twitchy – without surrendering the AI upside that’s powering the biggest gains?
Well, Eric just offered an idea…
A “Forever Stock” built for a shaky market
Eric’s Forever Stocks are core holdings you buy and hold through thick and thin – durable, essential businesses that don’t need a calm market or a cooperating Fed to keep making money.
And the one he just spotlighted is, in his words, “defiantly analog” – Primo Brands Corp. (PRMB). It’s one of the largest branded water companies in North America.
Primo manages springs, bottles water, runs delivery routes and restocks coolers across more than 200,000 retail outlets – a purely domestic, vertically integrated operation with a network of more than 80 springs, plants, and distribution centers, and 12,000 employees. About 35% of sales come from recurring direct-delivery orders that behave like a subscription utility: predictable revenue, sticky customers.
Here’s Eric with why he loves it in an AI-obsessed market:
Artificial intelligence cannot replace hydration. It cannot digitize a spring. It cannot virtualize a truck route.
The demand for clean water persists, regardless of technological shifts.
That makes Primo what Eric calls an “AI Survivor.” But that’s not all that it is…
Primo is also an “AI Applier”
Let’s go right back to Eric:
At the same time, Primo also fits in the AI Appliers category.
The company already invests in warehouse management systems, forecasting tools, and digital customer interfaces…
AI will not eliminate Primo’s network. It will make the entire operation more profitable.
And the business underneath is anything but stagnant. In its most recent quarter, Primo grew net sales by about 4% to $1.8 billion, beat earnings estimates, and raised its full-year sales outlook.
The stock itself is down over the last 12 months, but for a durable, cash-generating business, that’s what a long-term buyer looks for. I’ll note that while PRMB’s price has been drifting lower recently, Wall Street has been raising its price targets, with RBC recently moving to $31.
Here’s Eric’s bottom line – all the timelier considering the volatility surrounding the 10-year Treasury yield:
Technology will change. 蜜桃传媒s will rise and fall. Investment fads will come and go. But people will still need water – and Primo will still be there to deliver it.
Eric has a whole basket of these Forever Stocks.
From a stock you hold forever to a trade that paid off in two weeks…
How does 65% gains in just 10 trading days sound?
That’s the return on a tranche of the Uranium Royalty Corp. (UROY) trade that Jonathan Rose and his subscribers closed on Tuesday.
First, “congratulations” to everyone who cashed in, but more importantly, I want to show you how you can set yourself up for similar successes. It’s not hard or mysterious. In fact, Jonathan’s “Expected Move” tool can help you spot these trades – you just need to access it and know how to use it.
Now, what do you see in this chart of UROY?
Jonathan and his subscribers see a pattern you can profit from.
Here’s Jonathan to explain:
Those green and red bands aren’t just decoration. They form a map of where market makers are hedging, where institutions are positioning, and where the market expects price to stay contained.
Most of the time the stock moves in line with expectations. But when price steps outside those bands, that’s when something’s actually changed.
Jonathan is referencing the Expected Move. As a quick refresher, the Expected Move is what options traders use to gauge the range a stock or ETF is expected to move within – how far the options market expects it to move over a defined period.
But as Jonathan just noted, when price and expectations are misaligned, it can lead to profitable trades.
Just weeks ago, UROY was sitting near the edge of its lows – right where Jonathan’s Expected Move analysis told them the pattern favored a move higher. So, they placed their bets – and as of this week, found themselves sitting on another double-digit winner.
Back to Jonathan:
[This trade’s success] wasn’t luck. That’s what happens when you trade the structure instead of the story.
And that’s exactly what my Expected Move tool is designed to do.
Jonathan’s members have been using the Expected Move tool to spot attractive trades, and the feedback has been overwhelmingly positive.
Below is one such testimonial. If you can’t read it, the subscriber thanks Jonathan for the trading education, then writes:
The latest upgrade to the Challenge…is TREMENDOUS (I mean the Expected Move tool), that’s invaluable. Thank you so much.
If you’re less familiar with Jonathan’s “Challenge,” it’s his trading crash course. In it, he teaches the same framework he used on UROY – how to spot opportunities, structure defined-risk trades, and separate meaningful signals from market noise.
In any case, congrats to Jonathan and his subscribers on yet another win.
We’ll keep you updated on all these stories here in the Digest.
Have a good evening,
Jeff Remsburg
