Weak jobs report kills rate-hike fears — time to load up on long-term bonds
Thesis
The economy added barely half the jobs expected in June, signaling a rapid cooling in the labor market. Because the Federal Reserve uses job strength to justify raising interest rates, this weak report effectively takes the threat of higher rates off the table. We can see markets immediately pricing this in: Treasury bonds just had a massive rally as traders scaled back their rate-hike bets. When interest rates stop climbing or start falling, the bonds you already hold become more valuable. Buying long-dated Treasury ETFs captures this shift and pays you to wait if the economy continues to slow.
Strategy approach
Build a rule-based strategy that enters long TLT on D1 when the 10-year Treasury yield drops 0.10% (10 basis points) in a single day following a major macroeconomic data release. Exit if the 10-year yield rises back above its 20-day simple moving average. Use a 10% trailing stop and a 60-day max hold.