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Tech Dread Returns As US Yields Forget Pandemic
It was back to hand-wringing over rising rates Tuesday, as the US came back online after a long holiday weekend.
Two-year Treasury yields jumped above 1% for the first time since February 2020 (figure below), and 10-year yields touched 1.85%. As I put it here, it's all about Fed speculation. For equities, the primacy of rates in the market zeitgeist means style-, factor- and thematic- concerns will remain topical.
10-year German yields flirted with positive territory. A sustained move above ze
Equities are already down for the year based on central bank tapering and expected interest rate increases. I cannot fathom how anyone expects the economy to perform strongly with the central bank IV being slowed if not completely removed. It’s almost as if analysts haven’t accepted the reality that the global economy is directly tied to central bank policy!
It’s funny that now analysts are talking about “fundamentals” when it comes to tech. A few weeks ago it was all about how low interest rates could keep a P/E ratio about 2X the historical mean (business fundamentals weren’t the main factor). We’ll see investors’ true appetite for tech once we reach peak Central Bank hawkishness.