TRAVEL TUESDAY / MEMORABLE LAPAZ

 

Here we are by the light of one of those famous La Paz sunsets. 

By Jennifer Silva Redmond, Author of Honeymoon at Sea. 

Next in a continuing series of liveaboard (and off) adventures. 

The following is a repost of an adventure from after the last presidential election. Russel and I started talking about Baja California, the city of La Paz, specifically. “Remember the open market?” one of us would say, while we shopped. “I could use some of that tropical heat we used to complain about,” I would say, teeth chattering as I walked along a dewy trail on a misty morning. “Those sunsets on the embarcadero were incredible,” he’d murmur, as the sky slowly faded from blue to gray. 

 A friend had recently mentioned a newish airline, Volaris, so I went online and started looking at plane fares. It was cheap to fly down to La Paz from San Diego, where we’d be in January, and the new Cross Border Express (CBX) made it easy. Our friend Peggy in La Paz promised to put us up in her guest casita, so we had no reason not to go. Soon we had our reservations in hand—on on our phone screens, which amounts to the same thing. 

CBX entry US side

Our departure day was, not coincidentally, Inauguration Day. Seeing our flight south as a silent cry of resistance, we spent the morning with our eyes and ears averted from the news. A friend dropped us off at at CBX in San Ysidro, a friendly employee guided us through the printing of our FMM/visa forms, and we were walking through the tunnel toward Tijuana International airport minutes later. A smartly dressed young woman in immigration showed me how to use a debit card at a kiosk to pay our tourist tax (you pay this extra fee if you are staying more than 7 days, we were leaving on the eighth day). With nothing to declare, we walked through the third baggage X-ray machine holding our passports and visas and we were in the airport. 

 Lunch was a club sandwich we bought at a market booth in the waiting area, then we took a stool at the nearest bar, where Russel had a Bohemia Oscar and I had a zesty mojito. There was nada to do after that but watch our Volaris flight number climb up the LED departures sign until it was time to get in line and board. The takeoff went without a hitch, and the clouds parted a few times just long enough to see glimpses of the blue Sea of Cortez as we flew down the 1,000-mile long peninsula. As we swung toward the Pacific and then banked back toward the sea, long rays of papaya-gold sun broke out from under the gray clouds as the turquoise sky peeked through. 

We called a Didi, the local Uber, and soon were racing through the dark streets toward a brightly lit city that seemed ten times bigger than we recalled. In fact, La Paz had over 250,000 residents at the last census, and some say the population is closer to 300,000 by now. Peggy opened her gate when I texted and we three came into the main house to be greeted by her other friends, a family visiting from Mexico City. The big round table was set with colorful linens and a choice of wine or tequila was poured. We chatted in Spanglish through a delicious dinner of fresh fish in garlic and butter with grilled vegetables. Not long after dinner, we went out to the back garden where our tiny brick casita beckoned us and we soon sunk into our cozy bed. 

The next morning we had coffee with our friends and set off to see the city. We walked north all the way into the old Centro neighborhood. Our path took us clear over to Cinco de Mayo, one of the long avenues that runs alongside the central plaza, where the cathedral Nuestra Señora de La Paz [right], stands guard over the populace. Large stone pavers cover the plaza and leafy branches cast shade onto wrought iron benches where people sit to chat, watch children play on the gazebo steps, get their shoes shined, or sip a cool drink. Russel posed for me in his new sombrero de vaquero (cowboy hat) by the cathedral and I snapped him relaxing under the trees. 

 Walking two blocks brought us to the Malecon, the beachfront road [above], that is the most popular tourist area in the city. Its wide walking path, dotted with kiosks, gazebos and statues large and small, wraps alongside the calm bay for miles from the hotels at the north end of the city, all the way south to Marina de La Paz, which is where we were headed. But first, we needed lunch. We soon found Claros Fish, a welcoming palapa just off the waterfront that looked like an oasis for the footsore and hungry. We plopped into comfy chairs and ordered a cold beer and a Paloma (tequila and grapefruit juice). The taco menu ranged from the familiar to the unusual. We tried one manta ray but decided the grilled shrimp tacos were the best. 

Rested and ready for more we wandered another mile along the white sand beach, admiring the many new businesses and mourning the old Hotel Los Marcos, now boarded up and awaiting a new lease on life. We walked past the marina down a side street and finally found the new-to-us house of some old friends who’d texted the directions with no house number (apparently they’ve never known it by heart and had to go out and check what it was). We sat on their patio as the sun sank lower and soon it was time for dinner at The Dock [above], the waterfront restaurant at Marina de la Paz. Chile Rellenos were my choice and it was a good one, as the toothsome battered and fried chiles were served with a plate of yellow rice and stewed beans. 

 The next morning we found ourselves at The Dock again, just in time for the breakfast special, a machaca omelet, served with beans and tortillas. The spicy dried beef omelet was succulent and gave us the strength to do another walk into the city. Our chief destination was the wonderful Allende Books where we met Sylvie, a midlife woman who has created an oasis of literary culture on a cobblestone street flanked by stands bearing every type of souvenir. 

By mid afternoon we retired back to the shady casita for a nap and woke to find a fiesta in progress. Peggy’s friends had brought fresh oysters and ceviche for a comida (afternoon meal) and the meal was as diverting as the chat we shared in three languages. The party included Peggy’s Mexican friends—two men and two women—who were all about my age and one’s mother, a captivating beauty of 90, who spoke Spanish and some French. A recurring theme was how each of them had found their place—in Mexico City, Ensenada, or here in La Paz. The conversation sparkled for hours, with everyone adding a story, poem, or verse of song. 

Walking out the gate the next morning in the pre-dawn twilight, I could hardly see to navigate the uneven sidewalk. But as I turned onto the avenue, I could see a dozen people out and about in the half light—sweeping their store’s stoop, wiping down tables at coffee stands, walking to work or to church for morning mass (the bells had been ringing). As I walked along the nearly dark street, each person I passed murmured a buenos dias or buen dia with some men touching their hat brims or nodding gravely as they greeted me. I responded in kind. As I stepped onto the malecon and the sun lightened the sea, I realized that it hadn’t even occurred to me to be afraid of walking at that early hour through a “foreign” city. La Paz felt comfortable, homey. And I felt seen, and respected, by all I encountered. 

Saturday featured a road trip to El Triunfo, an old mining town that’s been transformed into a bustling destination location without losing any of its charm. We visited two excellent museums where young women welcomed us and explained the exhibits, and took a break at a world-class bakery whose sticky buns were a work of art. 

Our day trip included a long drive over bumpy roads to the coast of the Sea of Cortez. There we had a late lunch at a palapa restaurant [above], alongside Bahia de los Muertos, where the balmy breezes blew. I ordered shrimp fajitas which were served with fresh corn tortillas and freshly sautéed vegetables. 

 Sunday Peggy drove us to Playa El Coromuel, a lovely spot just north of La Paz. The sun shone and the Sea of Cortez was perfectly clear, with just a tint of green like sea glass. I walked right into the cool water, and after I dove in it felt quite pleasant. The temperature was in the high seventies and the water in the high sixties. We dined that afternoon at Nim, located in a lovely old building in the Centro, which more than lived up to its reputation of serving great food.  

We ended the day, and our week-long vacation, at Hotel HBlue Centro [above], up at their modern glass-walled rooftop bar, complete with an aquamarine wading pool and blazing fire pits, overlooking the sparkling city and the gleaming bay by the light of one of those famous La Paz sunsets.  ###

MAS LA PAZ

                                                                        Mercado 

                                                                    Allende Books

                                                        Hasta La Vista

 

STOCK MARKET / MAKING SENSE OF A ROLLER COASTER WEEK ON WALL STREET

GUEST BLOG / By Brock Weimer, CFA Investment Strategy with Edward Jones Company.

A roller-coaster week for rates: Separating opportunity from risk 

Key takeaways 

•Upward pressure on long-term Treasury yields weighed on investor sentiment, sending stocks lower last week. 

• Although the Treasury Department’s buyback announcement briefly pushed yields lower, the broader forces that we see driving yields higher remain in place. We continue to expect the 10-year Treasury yield to trade between 4.5% and 5.0% over the remainder of the year. 

• Higher yields have improved the multiyear return outlook for investment-grade bonds by increasing their income potential. However, with yields likely to remain range-bound in the near term, price appreciation may be limited, in our view. We recommend maintaining a neutral duration position relative to the U.S. investment-grade bond benchmark. 

• August and September have historically been seasonally weaker months for stocks, and uncertainty could rise as the midterm elections approach. While a period of near-term consolidation would not be surprising to us, resilient economic activity and strong corporate profit growth underpin a constructive backdrop for equities over the next 12 months, in our view. 

***

After a strong earnings season helped lift U.S. equity markets to record highs in August, stocks took a breather last week as the bond market moved to center stage. Rising long-term yields raised concerns about whether the economy and financial markets could continue to withstand higher borrowing costs, particularly as the 30-year Treasury yield reached its highest level since 2007 early in the week. 

Perhaps most surprising is that the latest rise in long-term yields has come on the heels of a weak July payrolls report, moderating inflation data, and reduced expectations for Federal Reserve rate hikes, conditions that would ordinarily place downward pressure on yields. 

The rise in long-term yields without a clear macroeconomic driver also caught policymakers’ attention. The Treasury Department announced that it would increase the size of its long-term Treasury buybacks beginning next month. Following the announcement, the 30-year Treasury yield fell by 0.1 percentage points on Wednesday, its largest one-day decline in more than a year. However, the reprieve proved short-lived, as long-term yields recouped much of the decline over the remainder of the week. 

In this week’s report, we unpack the forces putting upward pressure on longer-term yields and assess what they could mean for the economy and investor portfolios.

 Source: FactSet. Data as of mid-day 8/21/2026. Past performance does not guarantee future results. 

What's behind the move higher in long-term yields? 

Although no single macroeconomic development fully explains the upward pressure on longer-term yields, we believe several factors have contributed to the move over the past several months: 

• Higher bond supply: Elevated issuance of U.S. investment-grade corporate bonds may be contributing to the rise in yields. According to the Securities Industry and Financial Markets Association, or SIFMA, investment-grade U.S. corporate bond year-to-date issuance through July was 27.1% higher than during the same period in 2025. As discussed in our Monthly fixed-income focus, technology companies’ borrowing to fund artificial-intelligence investment has played what we consider to be an important role in the increase in corporate debt issuance. 

 • Ongoing geopolitical uncertainty: After falling below $70 per barrel in early July, West Texas Intermediate crude oil prices subsequently rebounded amid continued uncertainty in the Middle East and the flow of oil through the Strait of Hormuz. WTI rose back above $85 per barrel last week, adding to uncertainty about the outlook for global inflation. Encouragingly, however, market-based inflation expectations over the coming five- and 10-years remain contained. 

 • Upward pressure on global yields: The rise in longer-term government bond yields has not been unique to the United States. Long-term government bond yields in the United Kingdom, Japan, Canada, France and Germany have also moved toward multiyear highs. Although country-specific factors differ, the broadly synchronized increase may reflect a combination of heavier global government borrowing, renewed inflation uncertainty, and expectations that global policy rates could trend higher over the coming months. 

 • Investors demanding higher compensation to hold long-term bonds: Another factor contributing to higher long-term Treasury yields may be investors’ demand for greater compensation for the risks associated with holding longer-maturity bonds. The Federal Reserve Bank of New York publishes model-based estimates that decompose U.S. Treasury yields into two components: 

 1. The expected average path of short-term interest rates over the life of the bond. 2. The term premium, which represents the additional compensation investors require for the risk that interest rates may differ from expectations. 

According to the New York Fed’s model, the estimated 10-year Treasury term premium has generally moved higher in recent years, suggesting investors are requiring higher compensation to hold long-term bonds. However, the term premium remains relatively contained by historical standards and does not appear to signal immediate cause for concern. 

Source: FactSet, Federal Reserve Bank of New York. ACM 10-year Treasury Term Premium. 

In our view, some increase in the term premium is understandable given the current environment. Large fiscal deficits and growing federal borrowing needs have increased the supply of Treasury debt, which may require higher yields to attract investors. At the same time, the Federal Reserve’s reduced reliance on forward guidance under Chair Kevin Warsh may have increased uncertainty about the path of monetary policy. We believe that uncertainty is especially relevant at a time when geopolitical developments are clouding the outlook for inflation. All else equal, greater policy uncertainty may lead investors to demand additional compensation for holding longer-term bonds. 

Higher yields catch policymakers' attention 

After the 30-year Treasury yield reached its highest level since 2007 last week, the Treasury Department announced that it will increase purchases of off-the-run (not recently issued) Treasury securities with 10 to 30 years remaining until maturity. Beginning September 9, the maximum purchase amount will rise from $2 billion to at least $4 billion per operation. 

Although the increased purchases are small compared with the roughly $32 trillion Treasury market1, the announcement provided a powerful signaling effect, with the 30-year Treasury yield posting its largest daily decline in over a year. However, the program does not address the broader pressures that have contributed to higher yields, in our view, including large budget deficits, inflation uncertainty and increased debt supply. Reflecting this view, long-term yields recouped much of the initial decline. We expect these pressures to keep yields elevated, with the 10-year Treasury yield likely to trade between 4.5% and 5% over the remainder of the year. Looking forward, the administration is expected to unveil a fiscal consolidation initiative to help alleviate rising debt and funding costs, which may address some of the market uncertainty. 

While soft patches exist, corporate and economic activity have been resilient overall 

Interest-rate-sensitive parts of the economy have shown clear signs of weakness as borrowing costs have risen in recent years, with housing among the most affected sectors. Since the start of 2023, inflation-adjusted residential investment has been broadly flat and has contracted in five of the past six quarters. 

Last week, the NAHB/Wells Fargo Housing Market Index, a survey-based measure of homebuilder sentiment, edged up to 35 in August. However, it remained well below its 30-year average of approximately 51.5. Existing-home sales have also declined meaningfully as higher mortgage rates have reduced affordability for prospective buyers. 

Source: FactSet. 

The silver lining, in our view, is that other areas have remained resilient despite higher interest rates. On Friday, we learned that business activity remained solid in August, with the preliminary S&P Global Composite Purchasing Managers’ Index rising to 56.04, the highest reading since March of 2022. Household spending was also robust in the second quarter, with inflation-adjusted personal consumption rising at a 3.2% annualized rate. 

 Corporate earnings growth has also exceeded expectations this year. S&P 500 earnings are on pace to grow by more than 48% year-over-year in the second quarter, while full-year earnings are on pace to rise by 31%. Although strong profit growth among mega-cap technology companies has been a major contributor to the results for U.S. large-cap stocks, earnings strength has extended further down the market-cap spectrum. Earnings for U.S. small- and mid-cap stocks are also expected to grow by more than 20%. 

Source: FactSet. 

 Positioning portfolios in a higher interest-rate environment 

We expect fiscal concerns, increased bond issuance, broadly resilient economic activity, and uncertainty about inflation to keep interest rates higher for a while longer, though largely within a range of 4.5% to 5.0% for the 10-year Treasury over the remainder of the year. While this may limit the potential for meaningful price appreciation in bonds, we think higher yields have helped improve the longer-term appeal of investment-grade bonds and help reinforce their role as a strategic allocation in a well-diversified portfolio. 

We recommend investors maintain neutral duration exposure relative to the benchmark in U.S. investment-grade bonds. 

Against this backdrop, we believe the outlook over the next 12 months favors equities over fixed-income, particularly given the support from strong profit growth and healthy economic activity. Within equity markets, we acknowledge the potential for a period of near-term consolidation after what's been a solid move higher in 2026. August and September have historically been seasonally weaker months for stocks, and uncertainty could increase as the midterm elections approach, but periods of weakness may provide opportunities to add to equites, in line with your investment goals and risk tolerance. 

We specifically favor U.S. large- and mid-cap stocks, which we believe offer an attractive combination of quality, exposure to artificial intelligence, and sensitivity to continued economic resilience. We also favor emerging-market stocks, which we believe provide international exposure to strong profit growth tied to the AI buildout, while trading below their 10-year average forward price-to-earnings multiple. 

Source for all data not cited: FactSet. 1. Source: Treasury Department. Debt held by the public which does not include intragovernmental holdings of Treasuries. Brock Weimer Brock Weimer is responsible for analyzing economic data, assessing market trends, and supporting the development of resources that help clients work toward their long-term financial goals. 

About the Author: Brock Weimer graduated from Southern Illinois University Edwardsville with a bachelor's degree in economics and finance. He is a CFA® charter holder and member of the CFA Institute and CFA Society of St. Louis. 

Note: Edward Jones Company is the stockbroker of record with PillartoPost.org daily online magazine blog.