Making Sense Out Of Trump Victory And Bond Bloodbath - SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) | Seeking Alpha

Making Sense Out Of Trump Victory And Bond Bloodbath - SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) | Seeking Alpha

This is a great article on why government bonds are going down while big company names in the stock market are also sinking. Foreign governments are dumping bonds because they don't like the possibility of trade wars happening with Trump as the President. Usually government bonds are a safe place to hide when stocks are going down, but this is not the case in the new world order.

Secondly, interest rates are going up whether the Federal Reserve raises rates or not. This will result in a downturn for real estate, and the short real estate ETF, SRS, might be the best way to trade this scenario. Moreover, businesses will also be tanking because higher interest rates will make it harder for them to expand their companies or even keep the status quo.

Thirdly, while some say that banks thrive in a higher interest environment, the other side of the coin is that banks can lose on defaults and fewer loans due to the higher interest. This affects the so-called safe preferred stocks that have been paying attractive dividends. They are tied to banks enough that they will go down with the rest of stocks as interest rates rise.