Global bond markets are catching a breather as easing concerns around oil shipments through the Strait of Hormuz help calm inflation fears and shift investor attention back toward fixed income opportunities.
BNN Bloomberg spoke with Nick Piquard, chief options strategist and portfolio manager at Hamilton ETFs, about rising U.S. Treasury yields, elevated bond volatility and why investors may want to rebalance portfolios after a prolonged equity rally.
Key Takeaways
- The 30-year U.S. Treasury yield climbed above 5 per cent for the first time since 2007, creating what some investors see as an attractive entry point for government bonds.
- Many portfolios have become overweight equities after stocks significantly outperformed bonds during the inflationary cycle, increasing the case for rebalancing into fixed income.
- The MOVE Index, often described as the bond market’s equivalent of the VIX, is signalling elevated uncertainty and higher volatility in fixed income markets.
- Covered call strategies on government bond ETFs are giving investors new ways to generate additional yield while maintaining exposure to higher-quality fixed income assets.
- Nvidia earnings and cautious commentary from retailers including Target and Lowe’s are reinforcing investor focus on consumer sentiment and the sustainability of AI-driven growth expectations.
Read the full transcript below:
LINDSAY: Global bond markets are catching a bit of a breather on growing optimism that oil could soon resume flowing through the Strait of Hormuz, and that shift may help ease inflation pressures. Let’s get perspective now from Nick Piquard, chief options strategist and portfolio manager at Hamilton ETFs. Good morning. Thanks for joining us.
NICK: Good morning. Nice to be here.
LINDSAY: So, when we’re looking at the bond market, you’ve been focused mostly on U.S. bonds recently. Why is that?
NICK: Well, I mean, the U.S. bond market is, you know, the deepest, most liquid market in the world in terms of bond trading. It’s also the reserve currency, so everyone’s looking at what U.S. yields are doing. And what we’ve seen with the 30-year yield going up over 5 per cent, and now actually at its highest level since 2007, that is quite a feat, given where we were just a few years ago.
LINDSAY: Yeah, over the last couple of days, because of that selloff, like, as you mentioned, long-end yields up to multidecade highs that we’re seeing, what do you make of what we saw over the last couple of days with that sharp bond selloff?
NICK: Yeah, I think that obviously the market’s very concerned about inflation and inflation going forward, given what we’re seeing in the Middle East and what that means for oil prices in the future. But you’ve got to look 30 years down the road. That’s quite different from what we might see over the next few years. And if you look at inflation expectations over the longer term, they’re certainly up a little bit, but not up by as much as what the long-term yields are. So it might actually be a good idea to be looking at bonds now, especially when you compare that to a regular 60/40 portfolio, where equities have done so well relative to bonds. Most people might benefit from looking at rebalancing the portfolio, where they’re trimming some of those gains in equities and getting back into the bond market at attractive levels.
LINDSAY: Okay, so speaking of that then, how much bond exposure do you think investors should actually have in their portfolios?
NICK: I think a 60/40 portfolio makes sense for a lot of investors. If you have much less than that, then you’re not going to be as diversified. Sixty/40 is kind of an accepted level for a diversified portfolio, still leaving quite a bit of exposure to equities, but having some of that fixed income in your portfolio. However, what you might see over the near term is quite a bit of volatility in the bond market, as we’ve seen. Of course, bonds have been more volatile, and if you look at a measure of bond volatility, which we track using the MOVE Index, the MOVE Index is actually the equivalent of the VIX Index that we use for stocks. The MOVE Index measures fixed-income volatility. You’ll see that since the war started, that index has gone up quite a bit, and that’s a good thing for a covered call strategy, where you can monetize extra yield from that bond volatility.
LINDSAY: Yeah, and we have the MOVE Index chart up right now so everyone can see it. Why is this important for investors to keep this index in mind?
NICK: Yeah, for a long time, investors have looked at covered calls to get extra premium from their stocks. If you own Apple shares and you can write calls on Apple, you can get extra yield. But most people don’t think of using that same strategy on the fixed-income side of the portfolio. So if you think that fixed income is not going to go down too much more, but it’s also not going to go up that much more given the current inflation expectations, then using a covered call strategy on your bond portfolio is an interesting strategy. For a long time, investors couldn’t do that because bond options aren’t traded in the stock market, but now that we have bond ETFs and options on those bond ETFs, you can actually do that as well using currently listed stocks and derivatives.
LINDSAY: What are some of the biggest concerns you’re hearing from your clients right now?
NICK: Well, of course, the biggest concern is inflation and what that’s going to mean for rates going forward. Are we going to end up in an environment where the Federal Reserve and other central banks are going to have to raise interest rates to fight inflation because of rising energy prices? And if that’s the case, will investors lose confidence and not want to pay the current prices for bonds and yields keep going higher? But if you look at yields today, especially in the U.S., at over 5 per cent, as I said, that’s the highest in several decades. And even with inflation expectations around 3 per cent in the long term, that still gives you a good positive real yield, which is much higher than what we’ve seen over the past several years.
LINDSAY: I wanted to ask you about a couple of different stocks that are reporting earnings today and yesterday. So Nvidia obviously reporting at about 4:20 today, right after the bell. What are your thoughts on what you’re watching for with this company?
NICK: Well, Nvidia has been a fantastic performer, fantastic stock, earning record earnings for the company, and I would expect this quarter to be no different than the last few quarters, where they beat estimates. I think estimates right now are about $80 billion in revenue, and I think that they’re likely going to be able to beat that. They’ve beat their earnings for the last four quarters. The question for Nvidia is going forward. The stock is priced pretty aggressively in terms of forward estimates being quite elevated. So even though it’s only trading at mid-20s times 2027 earnings, it’s still very elevated earnings estimates. So can they maintain that growth? At the end of the day, the way we look at technology stocks, we want to own stocks that generate the most gross profits, and Nvidia is one of those names. So whether they beat estimates tonight or they don’t beat them, they’re still going to be one of the stocks to watch. They’re the biggest stock in the S&P index, and it’s still a stock you’re going to want to own.
LINDSAY: Target is another company that just recently reported. It beat sales gains, best sales gain rather in years, triple the gain analysts were actually expecting, but management is warning about a tougher Q1 on the way. So what were your takeaways from what we saw at Target?
NICK: Yeah, initially investors seemed to cheer the results. They beat estimates by quite a large margin, and the stock traded higher after hours. After the earnings call, it was a different story. Management struck a much more cautious note for the next year, and that’s not surprising when you look at Michigan sentiment numbers that are at record lows. This is a consumer discretionary stock, so it’s going to be impacted by consumer sentiment, and right now consumer sentiment is very, very low. But if you look at Target as a long-term company, this is a company that over the last 25 years has kept raising its dividends through recessions, through downturns, and even in the last few years when things have not been going well, they’ve maintained their dividend, and in fact, they’ve grown it. These are the kinds of companies that we call dividend champions and we think will do well over time. So despite the pullback today, if you think consumer sentiment can recover, which all indications are that it could, given that it’s near record lows, this actually might be a good opportunity to be looking at stocks like Target, or even Lowe’s, which reported yesterday as well.
LINDSAY: Yeah, Lowe’s saw a mixed Q1 as well. I was going to ask you about that, but we are out of time, so we’ll leave it there. Nick Piquard, chief options strategist and portfolio manager at Hamilton ETFs. Always appreciate your time. Thanks so much.
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This BNN Bloomberg summary and transcript of the May 20, 2026 interview with Nick Piquard are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
