Is This Stock Market Bounce Real? Dear Money & Crisis Reader, Stocks are getting some relief from Treasury yields’ recent pullback. As I’ve been noting for several weeks now, a rise in these yields posed a MAJOR threat to the stock market rally Why? Because the yield on U.S. Treasuries, particularly the 10-year U.S. Treasury, represents the “risk-free” rate of return for the global financial system. This means that all risk assets, including stocks, are priced based on where these yields are trading. So, as U.S. Treasury yields rise, stocks become less attractive as an asset class. This is particularly true when you consider that the U.S. now has over $27 trillion in debt and a debt-to-GDP ratio of 130%. And as I’ve been noting for several weeks now, Treasury yields have been rising aggressively. |
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