### Summary
The S&P 500 returns over the last one, five, and ten years are only slightly above their long-term averages, suggesting that the stock market is not unanchored from reality. However, the performance of long-term US Treasuries has been poor, with even 10-year Treasuries resulting in losses over the last five years. Slower economic growth may be on the horizon, but it remains uncertain whether it will be enough to bring down inflation rates.
### Facts
- The S&P 500 returns over the last one, five, and ten years are only slightly above their long-term averages.
- The performance of long-term US Treasuries has been weak, resulting in losses for investors even after accounting for coupon payments.
- Slower economic growth may be on the horizon, but it remains uncertain if it will bring down inflation rates.
- The nature of the stock market rally suggests that investors are still searching for buying opportunities rather than thinking about selling.
- Energy, industrials, and financials have become favored sectors, while technology stocks have started to decline.
- The Chinese economy is struggling, with retail sales and industrial production growth slowing down.
- The Federal Reserve has expressed concerns about inflation but also noted downside risks to the economy.
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Surging U.S. Treasury yields are causing concern among investors as they wonder how much it will impact the rally in stocks and speculative assets, with the S&P 500, technology sector, bitcoin, and high-growth names all experiencing losses; rising rates are making it more difficult for borrowers and increasing the appeal of risk-free Treasury yields.
Stocks are facing a "real" yield problem as investors become more focused on rising real yields, which could result in lower stock prices and a hit to the P/E multiple.
A stock market rally is expected in the near term, as recent market corrections have created potential opportunities for investors to increase equity exposure, despite the possibility of a 5-10% correction still lingering. Additionally, analysis suggests that sectors such as Utilities, Staples, Real Estate, Financials, and Bonds, which have underperformed in 2023, could present decent upside potential in 2024, particularly if there is a Federal Reserve rate-cutting cycle.
The stock market is rising despite bad news, as interest rates lower and stabilizing rates are seen as positive signs.
The stock market experienced a sharp decline as early gains turned into a selloff, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all falling; concerns over rising bond yields and inflation contributed to the sell-off.
Despite a decline in August, the US market is still in good shape, with a correction in stocks being viewed as a normal breather rather than the start of a bear market, while various trends and indicators suggest a continuation of the bullish trend.
Stock investors have been reacting positively to "bad economic news" as it may imply a slowdown in the economy and a potential halt to interest rate hikes by the Federal Reserve, however, for this trend to change, economic data would have to be much worse than it is currently.
The stock market has been stable recently, but it is expected to experience increased volatility in the future.
Treasury yields rise and stocks fall as traders anticipate longer-lasting higher rates to prevent inflation, while Brent oil briefly surpasses $95 a barrel; the Federal Reserve's decision on interest rates is eagerly awaited by investors.
The stock market faces a major issue as the dollar reaches a crucial level and could potentially break out.
Summary: The stock market made minor improvements after the Federal Reserve's announcement, with the major indexes off the lows of the day, but investors remain cautious due to economic news on Thursday.
Stocks tumbled after the Federal Reserve announced that interest rates will remain higher for longer; however, some analysts believe that the market's reaction was overblown and that higher rates and economic growth could actually lead to higher stock valuations.
Treasury yields are expected to rise in the future, which could have a negative impact on the stock market.
The Dow Jones Industrial Average dropped as the stock market correction worsened, and the 10-year Treasury yield reached new highs, with key inflation data expected later in the week, while Tesla stock fell and Apple and Microsoft stocks were mixed.
The recent decline in the US equity market is validating concerns about its lopsided nature, with a small number of top-performing stocks leading the market lower and the remaining companies struggling to make gains, potentially exacerbating losses in a rising Treasury yield environment.
Higher interest rates are causing a downturn in the stock market, but technological advancements in recent decades may provide some hope for investors.
The US dollar index and government bond yields reached their highest levels in years, causing stocks to plummet and signaling risk aversion in the market.
The recent surge in bond yields, with 10-year Treasury yields hitting levels not seen in over 15 years, is impacting the stock market as investors shift their focus to safer bond investments, which offer higher yields and less volatility than stocks.
Stocks ended the day higher as the surge in oil, the dollar, and Treasury yields slowed down, with the Nasdaq rising 0.8%, the S&P 500 gaining 0.6%, and the Dow Jones Industrial Average rising 0.4%.
U.S. stocks and bonds are falling due to another surge in Treasury yields, leading to anxiety among investors who fear that the Fed will hold interest rates higher for longer if the labor market remains strong.
The Dow Jones, Nasdaq, and S&P 500 are facing more potential corrections in October as stocks respond to a bond market selloff and economic data is closely scrutinized to validate the Federal Reserve's hawkish stance on inflation control, creating both challenges and compelling opportunities for investors.
Tech stocks could see a boost in the fourth quarter if Treasury yields decline, as their valuations have fallen relative to the broader market, according to Goldman Sachs analysts.
The major stock indexes are expected to open lower as the 10-year Treasury yield hits a 16-year high, with investors monitoring employment data for potential impact on interest rates; meanwhile, stock futures in Asia and Europe slumped as the Federal Reserve's message of higher interest rates reverberates worldwide.
The stock market sinks as Wall Street focuses on the downside of a strong job market, with rising Treasury yields putting pressure on stocks and making borrowing more expensive for companies and households.
The stock market's resilience in the face of rising bond yields could be a warning sign, as it mirrors the conditions seen before the 1987 stock crash and any sign of recession now could lead to a major sell-off, according to Societe Generale strategist Albert Edwards.
The Federal Reserve's shift towards higher interest rates is causing significant turmoil in financial markets, with major averages falling and Treasury yields reaching their highest levels in 16 years, resulting in increased costs of capital for companies and potential challenges for banks and consumers.
The Dow Jones Industrial Average and other indexes took a major hit in the stock market, with the Dow falling more than 500 points and the Nasdaq and S&P 500 also experiencing significant losses, as the cost of borrowing money increased and the yield on the Treasury 10-year bond reached a 16-year high.
Treasury yields continued to rise, reaching the highest levels since before the 2007-2009 recession, as investors demand more compensation to hold Treasuries and the bond-market selloff deepens, which has impacted stock markets and wiped out gains.
The recent downturn in the stock market has investors concerned due to rising bond yields, political dysfunction, geopolitical risks, and the historical association of market crashes in October.
Stocks fell sharply in response to an increase in long-term Treasury yields, driven by misguided rhetoric from Fed officials and fears of higher inflation, despite economic data showing slowing growth, low job growth, and declining wage growth.
Stocks plummeted as investors were spooked by the 10-year Treasury yield reaching its highest level since 2007, with markets concerned about a tight labor market and the possibility of rising yields continuing to put pressure on stocks.
The recent stock market pullback accompanied by a Treasury market rout has left investors increasingly pessimistic, but extreme pessimism could potentially lead to strong stock-market gains in the future, depending on how the situation resolves.
The stock market is currently experiencing the most significant U.S. Treasury bond bear market in history, while JPMorgan's Chief Market Strategist predicts potential turbulence and a recession on the horizon; meanwhile, stocks opened lower on Friday morning after the September non-farm payrolls data, and U.S. futures are shaky as traders await the release of the Non-Farm Payrolls report, with experts predicting lower job additions and a potential fall in the unemployment rate.
The rise in Treasury bond yields above 5% could lead to a more sustainable increase and potential havoc in financial markets, as investors demand greater compensation for risk and corporate credit spreads widen, making government debt a more attractive option and leaving the stock market vulnerable to declines; despite this, stock investors appeared unfazed by the September jobs report and all three major stock indexes were higher by the end of trading.
The surge in Treasury yields has negatively impacted stocks with bond-like qualities, particularly in sectors such as utilities and consumer staples, leading to significant losses for bond proxies.
The Treasury bond market sell-off has led to a significant crash, causing high yields that are impacting stocks, commodities, cryptocurrencies, housing, and foreign currencies.
Stocks are defying factors that would normally cause them to fall, such as war in the Middle East and economic uncertainty, due to a decrease in bond yields and investors seeking safety in Treasuries.
Treasury yields have fallen from their recent highs, but the market's "pain trade" may not be over yet, as weak economic data and the upcoming inflation report could keep yields from coming down and staying down.
US stocks are currently at their most expensive levels compared to the debt market in over two decades, raising concerns of a potential market correction similar to the dot-com crash in 2000. Research has shown that this level of stock valuation has historically triggered major market corrections.
The U.S. stock market is currently trading at a discount to fair value, and Morningstar expects rates to come down faster due to optimism on inflation; strong growth is projected in Q3, but the economy may slow down in Q4, and inflation is expected to fall in 2023 and reach the Fed's 2% target in 2024. The report also provides outlooks for various sectors, including technology, energy, and utilities, and highlights some top stock picks. The fixed-income outlook suggests that while interest rates may rise in the short term, rates are expected to come down over time, making it a good time for longer-term fixed-income investments. The corporate bond market has outperformed this year, and although bankruptcies and downgrades may increase, investors are still being adequately compensated for the risks.
Stocks plummeted as Treasury yields rose, consumer prices increased, and a disappointing bond auction caused a decline in the broader stock market.
The surge in US treasury yields has caused concern among investors due to the lack of an easy explanation, with expectations of hawkish monetary policy, increased bond issuance, and declining demand being potential factors contributing to the rise.
Treasury yields rise and stock struggle as positive economic reports support the argument for the Federal Reserve to maintain higher interest rates for a longer period of time.
