Plain Markets
Market Engineering
Why markets move the way they do — and when they don't.
Daily brief
U.S. stocks finished mixed on Friday: the S&P 500 rose 0.17% and the Nasdaq Composite gained 0.39%, while the Dow Jones Industrial Average fell 0.18%. Oil fell 1.6% to $100.30 a barrel.
Glossary
Term premium
Term premium is the extra return investors may demand for locking money into a longer-term bond instead of repeatedly using shorter-term bonds. It tends to rise when investors see more uncertainty around future inflation, interest rates, or government borrowing.
Finance notes
Why can long-term bond yields rise even when expectations for future central-bank rates barely change?
Long yields can rise as the term premium rises even with stable policy expectations, but estimates can blur the source of the move.
Why can short covering turn a modest rebound into a much larger price move?
Short covering can amplify a rebound when many shorts must buy into limited supply, but the loop weakens when forced buying fades.
Why do bond prices fall when yields rise?
Higher yields usually mean lower fixed-rate bond prices, but the shortcut can fail when the yield or cash flows being compared are different.
Why does gold often rise when the dollar falls?
Gold is quoted in dollars, so a weaker dollar mechanically lifts the gold price — but the link is a tendency, not a rule, and it breaks in predictable ways.