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“Parents of young children should realize that few people, and maybe no one, will find their children as enchanting as they do.” – Barbara Walters

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Barbara Walters may not have realized it at the time, but she also provided some sage investment advice with the quote above. Swap in a few words here and there, and you come up with “People with investment portfolios should realize that few people, and maybe no one, will find their holdings as enchanting as they do.” As investors, we often buy a stock and, somehow, once it lands in our portfolio, we feel far more loyal to it, even when an outsider would take one look and say, “Get that brat out of here.”

The eggheads call this the endowment effect, where we value things more simply because they’re ours. With stocks, it shows up in multiple ways, such as focusing on why we originally bought it, ignoring the warning signals, coming up with new reasons to justify holding it, or wanting to get back to even before we sell. To avoid this bias, always ask yourself, if you didn’t already own this stock, would you buy it today? If not, you may want to tell that brat to pack up not to let the door hit him on the way out.

Futures are pointing higher this morning, with the S&P 500 indicated to open 0.4% higher while the Nasdaq is up 0.65%. Lower oil prices have supported the gains even as Treasury yields are basically unchanged. Gold is up 1%, while Bitcoin is down fractionally.

Asian stocks were mixed to close out the week, at least those that were open. The Nikkei was up 1.4%, while Hong Kong was down 1%. Onshore Chinese stocks and the South Korean Kospi were both closed. The gain in Japan was the Nikkei’s fifth in a row, with three days of gains leading up to this week’s three-day holiday and two positive days to close out the week,

European stocks are broadly higher this morning. The STOXX 600 is up 0.5%, with Italy and Spain leading the way higher with gains of over 1% each, while the UK and France lag. Consumer Confidence in Germany was weaker than expected, while sentiment in the UK lagged.

This morning’s economic data kicked off at 8:30 with Durable Goods, which came in better than expected at the headline level and weaker after stripping out Transportation. The only other report on the calendar is Michigan Sentiment at 10 AM. We’ll also hear from multiple Fed speakers, including NY Fed President Williams, KC Fed President Schmid, and Cleveland Fed President Hammack.

Treasury yields are little changed this morning, which is a win when they seem to go up every day, week, and month. This week will mark the fourth straight week of gains in the 10-year yield. Yesterday, the 10-year yield looked like it was going parabolic at 5.1%, but yesterday, yields topped 5.2%!

Barring a historic decline in the last few days of the month, September will be the seventh straight monthly increase in the 10-year yield. That’s tied with two other periods for the longest streak since 1969, and there have only been two streaks that lasted longer at eight months each (ending in February 1966 and March 1969).

You would think that after a seven-month streak of increases, the 10-year yield would be due for a pullback and bonds catch a bid. Looking at a long-term chart, don’t hold your breath. As shown, the eight-month streaks in the 1960s came when the yield was 5% and then 6%, but on its way to 8% in the early 1970s. In 1978, the seven-month streak came after yields had risen from 7% to over 8%, but it kept going from there on its way to more than 15%!

The one streak that coincided with a peak in yields was in 2011, when the yield went from 2.5% to 3.5% and then back down to under 2%. As shown in the chart, though, that streak occurred within a much longer-term downtrend as opposed to the newly emerging uptrend in yields. Investors in the US Treasury market could use a break from the yield increase, but prior seven-month streaks of monthly gains in the 10-year yield usually weren’t a prelude to a move lower in yields.

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