Barron’s (August 14)
“Investors have typically penalized emerging markets such as Turkey, Argentina, and China due to concerns about the independence of the central bank, government intervention in the private sector, and rampant overspending.” Now these concerns are focused on “the U.S., which has historically been the paragon of a developed market.” Investors are reevaluating “the premium that U.S. assets have long commanded” and this could lead to “weaker long-run returns for stocks or, more immediately, higher bond yields and a continuation in the weakness of the dollar that has emerged this year.”
Tags: Argentina, Bond yields, Central bank, China, Developed market, Emerging markets, Government intervention, Independence, Investors, Overspending, Paragon, Penalized, Premium, Private-sector, Rampant, Reevaluating, Returns, Stocks, Turkey, U.S. assets
MarketWatch (May 22)
“A soaring 30-year Treasury yield has grabbed the lion’s share of attention lately when it comes to signaling how the U.S. fiscal outlook is rattling investors.” What’s happening in Japan, as bond yields surge, is a “less-talked-about factor weighing on sentiment.” Yields on 30-year JGBs rose “to almost 3.17% on Thursday, the highest in roughly 25 years of record-keeping” while 40-year yields “jumped to 3.67%, the highest level since its inception in 2007.” The “sharply higher yields on Japanese government bonds” may already be enticing “the country’s investors to return home.” It is likely that “the recent selloff in the Japanese bond market may have played at least some role in the Treasury market’s own selloff of the longest-dated government maturity Thursday morning.”
Tags: 3.67%, 30-year, 40 year, Bond yields, Enticing, Fiscal outlook, Investors, JGBs, Rattling, Sentiment, Soaring, Surge, Treasury, U.S.
New York Times (September 28)
“Stocks are heading for their worst month of the year as a triple whammy of soaring bond yields, rising oil prices and slowing growth trigger a widespread sell-off, even in once-loved mega-cap tech companies.”
Tags: Bond yields, Mega-cap, Oil prices, Sell-off, Slowing growth, Stocks, Tech companies, Triple whammy, Worst month
The Economist (May 28)
Signs suggest “America’s markets are entering a new, more worrying phase.” Falling share prices could initially be attributed to the Federal Reserve’s policy moves, but “in recent weeks share prices have kept falling, even as bond yields have dropped back,” a combination suggesting recession. “Indeed, the mix of Fed tightening, slowing gdp and rising production costs has the ominous feel of the later stages of a business cycle. The expansion is barely two years old. Yet investors are already worried that corporate profits are under threat.”
Tags: Bond yields, Business cycle, Expansion, Falling, Fed, GDP, Investors, Markets, Ominous, Production costs, Profits, Recession, Share prices, Signs, Tightening, U.S., Worried, Worrying
New York Times (March 18)
Financial markets took the Fed’s higher rates in stride. “The stock market rose, bond yields wavered and commodity prices moderated. But whether the economy can withstand rising rates during a period of geopolitical turmoil and a lingering pandemic is a question without an immediate answer.”
Tags: Bond yields, Commodity prices, Economy, Fed, Financial markets, Geopolitical turmoil, Pandemic, Rising rates, Stock market, Withstand
Reuters (April 1)
“Global equity markets surged on Thursday, with U.S. and European benchmark indexes hitting record highs, as the strongest manufacturing data around the world in decades and a drop in bond yields drove investor optimism.” Support is strong with “multiple tailwinds— stimulus, expectations of record earnings, vaccines—driving stocks higher.”
Tags: Benchmark, Bond yields, Earnings, Equity, Europe, Global, Indexes, Investor, Manufacturing, Markets, Optimism, Stimulus, Surged, Tailwinds, U.S.
Barron’s (September 12)
“Be careful what you wish for when calling for zero or negative interest rates, Mr. President.” There’s a downside and the results are not inspiring. “The record of negative rates in the euro zone, Sweden, Denmark, Switzerland, and Japan has been mixed…. While bond yields have fallen below zero, banks been reluctant to impose negative rates on depositors, resulting in a squeeze on their profits.”
Tags: Banks, Bond yields, Denmark, Depositors, Downside, EU, Interest rates, Japan, Negative rates, Sweden, Switzerland, Trump, U.S.
Institutional Investor (September 19)
“A sense of dissonance” is overcoming global markets, according to the Bank for International Settlements. “Falling bond yields are normally associated with subdued growth…yet stock markets around the world have rallied even as corporate profitability has lagged.” Furthermore, the ten-year yield on many major sovereigns is “running well below the nominal rate of growth in gross domestic product, breaking a 65-year pattern in which the two have tracked each other closely.”
Tags: Bank for International Settlements, Bond yields, Dissonance, GDP, Global markets, Growth, Profitability, Sovereigns, Stock markets
Bloomberg (March 25)
There are lots of questions for the Bank of Japan about its negative rate strategy, which “has caused bond yields to fall below zero, money market funds to stop accepting money, and lawmakers to summon Bank of Japan Governor Haruhiko Kuroda to parliament a record number of times to explain it.”
Tags: BOJ, Bond yields, Kuroda, Lawmakers, MMF, Negative rates, Parliament, Strategy
