Bonds Boring, Stocks Higher with Groupon Tanking

As a bond guy, I want there to be some movement everyday in rates. Today, I got nothing.  The yield on the 12 month and 2 year Treasury did not move.  The 10 year yield moved down 0.02%, staying very close to the psychologically important 2.00% level.

But I did get some good news.

Groupon stock (GRPN) is having a bad evening after releasing earnings, in after hours trading the stock is down 10%.  Groupon does not provide value to its merchants or at least most of them.  As you know, Groupon offers deals – often 50% off the retail prices.  Then they split the money with the merchant selling the product or service.
In most cases, the merchant will lose money on the transaction.  The idea is that the merchant will gain customers in exchange for losing money on the first sale.  However, the merchants that I have been in contact with, say they don’t gain customers.  As a result, they are unlikely to use Groupon a second time.  Without merchants, there is no Groupon.  The S&P 500 (SPY) closed 3 points higher than yesterday at 1,349.96, up 0.22%.  The bond market was almost flat as iShares Barclays Aggregate Bond ETF (AGG) finished 9 cents down at  $110.44, 0.08% lower than the previous day. (note as bond prices fall, yields increase).
The Dow Jones industrial Average (ETF: DIA) rose 6 points closing at 12,883, up  0.04%.  In terms of individual Stocks, a number of companies beat earnings expectations including Visa (V), Cisco (CSCO) and Time Warner (TWX).  The exception to the rule was Sprint (S) which disappointed.

In terms of the treasury bond market, the iShares Barclays 20 Year Treasury Bond Fund (TLT) rose 9 cents  to $116.36.  Junk bonds rose slightly as represented by the  iShares iBoxx $ High Yield Corporate Bond Fund (HYG) ending higher 8 cents at $91.00.

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