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17 September 2021
21:14 hour

NewsWatch: Why the stock market’s big rotation can continue even if bond yields stop rising

Market Watch

02/03/2021 - 23:02

Rising bond yields get credit for fueling a rotation away from the U.S. stock market's pandemic winners toward shares of companies more sensitive to the economic cycle. In reality, there's a lot more to it, says one market economist.


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Related headlines:

  1. The Tell: Why the stock market’s big rotation can continue even if bond yields stop rising (02/03/2021 - Market Watch)
    Rising bond yields get credit for fueling a rotation away from the U.S. stock market's pandemic winners toward shares of companies more sensitive to the economic cycle. In reality, there's a lot more to it, says one market economist.
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  2. NewsWatch: Stock market crash? No, but rising bond yields are sparking a nerve-racking rotation below the surface (04/03/2021 - Market Watch)
    Despite the hashtags, the stock market is far from “crash” territory, as anyone with a working memory of last year's pandemic-inspired selloff would recall. But a rotation away from the market's recent leaders does appear to be under way.
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  3. NewsWatch: Can the bull market in stocks survive rising inflation, bond yields? Here’s what history says (22/02/2021 - Market Watch)
    Rising bond yields are sending shivers through the stock market. Here's a sector-by-sector breakdown of what history says about a rising rate environment.
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  4. In One Chart: Rising bond yields mean these stock-market sectors have the most to gain — or lose (22/02/2021 - Market Watch)
    Rising bond yields are sending shivers through the stock market. Here's a sector-by-sector breakdown of what history says about a rising rate environment.
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  5. Why do bond yields rising matter? (26/02/2021 - Reddit Stock Market)
    Why does bond yield rising matter? I’ve read that it’s because of expectations of inflation and the increase of interest rates to combat said inflation. Higher interest rates hurting the stock market makes sense. Bond yields going up in anticipation of inflation makes sense as people don’t want to to buy bonds when there is high inflation, which increases yield prices But does bond yield prices DIRECTLY affect the stock market? Or is it just that as expectations of inflation increase, bond yields go up and the stock market is also hurt, tho not by bond yields going up. So is the real problem the expectations of inflation and ensuing increase of interest rates and not the bond yields going up?   submitted by   /u/Django_lover [link]   [comments]
    [visit article]
  6. The Tell: 3 reasons why the stock market might be able to survive rising bond yields in 2021 (23/02/2021 - Market Watch)
    Rising Treasury yields are contributing to a selloff by the stock market's pandemic highfliers, but probably won't be enough to spoil the appeal of stocks over bonds, one analyst says.
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  7. The Tell: 3 reasons why the stock market might be able to survive rising bond yields in 2021 (23/02/2021 - Market Watch)
    Rising Treasury yields are contributing to a selloff by the stock market's pandemic highfliers, but probably won't be enough to spoil the appeal of stocks over bonds, one analyst says.
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  8. NewsWatch: Dow up nearly 500 points Monday as rising bond yields subdue tech stock gains (08/03/2021 - Market Watch)
    U.S. stocks mostly gained ground late morning Monday, pushing past early weakness in tech-related shares, which are seen as most vulnerable as government bond yields extend their climb following the Senate's passage of a $1.9 trillion COVID-19 relief package.
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  9. NewsWatch: Nasdaq books biggest daily gain in 5 months as falling bond yields fuel tech bounce (09/03/2021 - Market Watch)
    U.S. stock-market benchmarks rally Tuesday as falling bond yields help to send the tech-heavy Nasdaq Composite up sharply a day after it tumbled into correction territory.
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  10. Market Snapshot: Dow futures fall 170 points as bond yields extend rise (22/02/2021 - Market Watch)
    Stock-index futures point to a lower start for Wall Street Monday as investors keep a wary eye on rising bond yields.
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  11. Market Snapshot: Why you should not freak out about the 10-year U.S. Treasury yield hitting 1.7% (20/03/2021 - Market Watch)
    There are pros to rising U.S. government bond yields a year after stock and bond markets tanked in response to the pandemic, but there are also cons if the sharp climb in yields keeps up.
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  12. NewsWatch: Dow retreats from record while surge in bond yields sends Nasdaq down 3% (18/03/2021 - Market Watch)
    Stocks finish sharply lower Thursday as another jump in U.S. Treasury yields meeting, reflected expectations for faster economic recovery and inflation, fueling more rotation into sectors likely to benefit from business sectors reviving from the pandemic. rather than technology stocks that benefited from last year's work-from-home trend.
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  13. Market Snapshot: U.S. stock futures point to renewed pressure on tech as bond yields jump (18/03/2021 - Market Watch)
    U.S. stock-index futures trade mixed Thursday, with the Nasdaq-100 contract under pressure as a jump in Treasury yields following the previous day's Federal Reserve policy meeting appeared set to fuel another round of rotation into more cyclically sensitive sectors.
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  14. Bond yield relationship to stock price in current market (01/03/2021 - Reddit Stocks)
    I am a bit confused about what is going on in the markets right now. To my understanding, rapid increases in Treasury yields have prompted equities selloffs. However, bond yields only go up when prices go down, correct? And prices go down when people are selling bonds faster than they are buying them. It seems to me that the only reason for a selloff would be optimism in the future economy and rising inflation expectations. But if people are optimistic and selling bonds, why are equity prices decreasing? Surely the same people who sold the bonds and are optimistic would put money into equity markets, leading to higher prices? I understand that higher bond yields lead other investors to think about moving capital there, but how can bond yields go up and stock prices go down at the same time? Wouldn't the demand for bonds quickly cap the rise in yields (and lead to yields falling again)?   submitted by   /u/SaitosElephant [link]   [comments]
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  15. NewsWatch: Dow drops 300 points as growth scare triggers fall in bond yields (08/07/2021 - Market Watch)
    U.S. stocks fall sharply Thursday as yields on government bonds extend their decline as investors shy away from bets on a blistering economic recovery and rising inflation.
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  16. Which stocks will be most sensitive to a rising bond market? Something like "Rho", but for stocks (07/03/2021 - Reddit Stocks)
    As explained in this Forbes article (and many other places) as Treasury yields rise, stocks become less attractive (the "equity risk premium" decreases). However, since rising Treasury yields generally coincide with a growing economy, the lower equity risk premium is often offset by consumer demand etc driving up earnings and therefore share prices. But that boost isn't equally distributed throughout the market, so the rising bond market will affect some stocks more than others. So there are two variables to consider: sensitivity to a rising bond market and gains from near term economic growth. As I understand it, companies with valuations that are more heavily dependent on far future earnings will be most sensitive to interest rate hikes. That's because future cash flows have to be discounted more aggressively in an environment of rising Fed rates since it becomes more expensive to borrow money to make it to the horizon of profitability. So investors might be enticed away from growth stocks and into value stocks and increasingly profitable "risk-free" Treasuries. So the big question is which stocks will be most sensitive to a rising bond market? Are there technical indicators you can use to determine a stock's sensitivity to a rising bond market? High P/E would seem suspect, for example... The options greek "Rho" measures the price change for an option relative to the risk-free rate of interest... Is there something similar for stocks? That would be a freebie. And of those sensitive-to-rising-bond-market stocks, which ones stand to benefit the least from a booming economy? That gives us our trim list. I know I'm probably making this too simplistic. Would love to hear if anyone else is concerned about the prospect of a rising bond market and what you're doing about it.   submitted by   /u/mitch_feaster [link]   [comments]
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  17. Can someone explain to me why bond yields are becoming so important now? (17/03/2021 - Reddit Stocks)
    What am I missing? It seems as if the 10 year bond yield was double what it is now, yet it didn't stop or slow down the bull market that went on back then, so why are people saying this is the reason for the market being pulled down? I thought the market tended to go up with inflation, so why are we going down?   submitted by   /u/RowanHarley [link]   [comments]
    [visit article]
  18. Market Snapshot: Stock futures lower as rising bond yields keep pressure on tech shares (08/03/2021 - Market Watch)
    Stock-index futures fall Monday, with tech-related shares set to feel the brunt of selling pressure as government bond yields extend their climb following Senate passage of a $1.9 trillion COVID-19 relief package.
    [visit article]
  19. Market Snapshot: Stock futures lower as rising bond yields keep pressure on tech shares (08/03/2021 - Market Watch)
    Stock-index futures fall Monday, with tech-related shares set to feel the brunt of selling pressure as government bond yields extend their climb following Senate passage of a $1.9 trillion COVID-19 relief package.
    [visit article]
  20. Europe Markets: Stock markets return to winning form as bond yields ease (01/03/2021 - Market Watch)
    The fears over falling bond prices that gripped the market receded on Monday, as European stocks and U.S. stock futures rose as bond yields fell.
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  21. NewsWatch: 7 reasons stocks are a buy even as bond yields climb, strategist says (22/02/2021 - Market Watch)
    Stocks are under pressure at the start of the week, as bond yields rise on hopes a global economic recovery is around the corner.
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  22. NewsWatch: The rational bubble is turning irrational — and the next few weeks are critical, strategist says (19/02/2021 - Market Watch)
    The action this week has been centered on the bond market, not the stock market, as Treasury yields have climbed in reaction to the progress on a new stimulus package as well as the global rollout of vaccines.
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  23. Market Snapshot: Dow futures point lower after rising bond yields spark tech rout (26/02/2021 - Market Watch)
    Stock-index futures trade mostly higher in choppy price action after rising Treasury yields sparked a tech-led selloff that left the Nasdaq Composite with its biggest one-day loss since October.
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  24. Market Extra: Here are parts of the market most vulnerable to a bond-market ‘taper tantrum’ (22/02/2021 - Market Watch)
    Rising Treasury yields and emboldened bond bears are prompting investors to reach out for historical playbooks.
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  25. NewsWatch: Don’t be fooled — inflation is a big risk for stock market investors. Here’s how to prepare (13/06/2021 - Market Watch)
    Michael Brush advises on how you can avoid making mistakes as bond yields rise and the central bank reduces its stimulus.
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  26. NewsWatch: S&P 500 and Dow retreat from records as bond yields decline (15/03/2021 - Market Watch)
    Stock-market benchmarks are trading lower on Monday, as investors wait to see if the Dow Jones Industrial Average and the S&P 500 will build on last week's record finish.
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  27. NewsWatch: Don’t be fooled — inflation is a big risk for stock market investors. Here’s how to prepare (13/06/2021 - Market Watch)
    Michael Brush advises on how you can avoid making mistakes as bond yields rise and the central bank reduces its stimulus.
    [visit article]
  28. NewsWatch: Don’t be fooled — inflation is a big risk for stock market investors. Here’s how to prepare (12/06/2021 - Market Watch)
    Michael Brush advises on how you can avoid making mistakes as bond yields rise and the central bank reduces its stimulus.
    [visit article]
  29. ELI5: Why did rising bond yields played such a huge part in the sell-off today? (26/02/2021 - Reddit Stocks)
    I'm going to start by stating that I understand down days happen and I'm not nervous in the slightest by what happened today. Im a long term investor with time on my side, so a red day is okay. Im relatively new at investing (about a year of experience). I'm very curious why bond yield rates rising caused many, if not most industries to take a slight dip today? From what I have been reading, many people attribute bond yields rising as a sign of economic improvement triggered by the covid vaccine being more widely available. It seems a bit contradictory that a sign of economic improvement would push the market down, but im sure I'm missing something. Anybody care to explain?   submitted by   /u/beerboobznkitties [link]   [comments]
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  30. Timing the Bond Auctions/Yields (10/03/2021 - Reddit Stock Market)
    I’m a new investor, but what I’ve heard is that the US Treasury is having bond auctions tomorrow and Thursday, and that if they go well, the bond yields should settle down, which will be good for growth stocks. However, if the bond auctions go poorly, the bond yields will rise, which will continue to tank growth stocks. First off, does anyone know what time these are happening? I’m not seeing a lot of information on them. I would love to invest more into growth stocks like QQQM, ARKK/ARKG, renewable energy (PBD), and cannabis (YOLO) because I’m bullish about their long term prospects, but I’m trying to avoid the recent increase in market volatility. I’m worried about making moves tomorrow morning if they’re going to drop after these bond auctions. Should I wait until tomorrow afternoon? Thursday? Friday?   submitted by   /u/msudrummer [link]   [comments]
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  31. NewsWatch: Markets set up for disappointment from Fed meeting as bond yields renew rise (17/03/2021 - Market Watch)
    All eyes will be on the Federal Reserve's meeting next week as traders put pressure on the central bank to prevent a de-stabilizing rise in bond yields.
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  32. NewsWatch: Markets set up for disappointment from Fed meeting as bond yields renew rise (14/03/2021 - Market Watch)
    All eyes will be on the Federal Reserve's meeting next week as traders put pressure on the central bank to prevent a de-stabilizing rise in bond yields.
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  33. Rising bond yields continue to weigh on financial markets (30/03/2021 - Seeking Alpha)

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  34. NewsWatch: Tech stocks are selling off. Don’t buy the dip, sell the bounces, strategist says (08/03/2021 - Market Watch)
    Technology stocks are under pressure at the start of the week, as bond yields continue to rise.
    [visit article]
  35. The Tell: ‘Bubble-like behavior’ unlikely to destabilize the stock market, but JPMorgan says value will prove a ‘cushion’ as yields rise (16/08/2021 - Market Watch)
    Bond yields and cyclical bets in equities probably bottomed this month and are on their way up for the rest of 2021, with rising rates and pockets of “bubble-like behavior” unlikely to destabilize the stock market, according to a JPMorgan strategists.
    [visit article]
  36. Market Snapshot: Stock futures bounce as bond yields pull back (19/03/2021 - Market Watch)
    Stock-index futures edge higher Friday, signaling the market would attempt to bounce a day after a sharp rise in bond yields was blamed for sending equities, particularly tech shares, to losses.
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  37. Yields? Rotation? Valuation? What's going on with the stock market? (25/03/2021 - Seeking Alpha)

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  38. Rising bond yields continue to drag global shares lower (05/03/2021 - Seeking Alpha)

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  39. Benchmark bond yields rise as crude oil inches higher (23/08/2021 - Financial Express)
    “Rising crude oil and central bank's minutes of the August monetary policy put pressure on bond yields today, hence, we have seen a rise in yields on the benchmark bond,” a dealer with a private bank said.
    [visit article]
  40. What’s up with tech today? (24/03/2021 - Reddit Stocks)
    Last dip fair enough we had a reason why we reached such lows. Bond yields, ‘rotation’, inflation fears. Today some stocks have just fallen of a cliff much steeper than last time. Down 5,10,15%. No apparent reason. Bond yields are stable, Fed has reassured interest rates will not go up any time soon, inflation will be capped around 2%. The VIX is also considerably lowers.   submitted by   /u/theepicone111 [link]   [comments]
    [visit article]
  41. The Tell: Why a big drop in bond yields ‘freaks people out’ and sends stocks tumbling (19/07/2021 - Market Watch)
    Stock market investors were spooked Monday by a sharp move lower in Treasury yields amid growing concern over rising cases of Covid-19 globally, according to Phil Camporeale, a portfolio manager at JPMorgan Chase & Co.
    [visit article]
  42. Bond Report: U.S. Treasury yields hold ground as bond market finds footing (20/04/2021 - Market Watch)
    U.S. Treasury yields lacked direction on early Tuesday as the bond market continued to consolidate at the lower bound of its recent trading range.
    [visit article]
  43. Cheaper US stocks catching up expensive peers on Wall Street, thanks to rising bond yields (01/03/2021 - Financial Express)
    With the global economy now recovering from the pandemic and economic outlook improving, bond yields are coming back up.
    [visit article]
  44. Interesting trend with the relationship between stock prices and bond yields (23/03/2021 - Reddit Stocks)
    Somebody linked me this twitter post on bond yields. I know there's probably a lot of you here that don't believe in trends, but when bond yields peak, we tend to enter a bull market. Who knows if we've hit that peak yet, but there have been only 2 occasions where this wasn't the case. https://mobile.twitter.com/Trendspider_J/status/1373018892524687365?s=20 Do what you like. I'm not your financial advisor, I just said I'd post this because it's an interesting trend   submitted by   /u/RowanHarley [link]   [comments]
    [visit article]
  45. Bond Discussion (26/07/2021 - Reddit Stocks)
    Early morning there was a complete rout in yields due to Asian investors fleeing to bonds from the Chinese tech selloff. Going into the fed meeting tomorrow do you think, even with a hawkish fed, that yields will continue to fall? Imo the buying pressure from Asian investors and growth concerns are going to continue the bond rally.   submitted by   /u/FunRepresentative639 [link]   [comments]
    [visit article]
  46. Market Extra: Bond King Jeff Gundlach says there is a simple reason Treasury yields are so low even as inflation surges (15/07/2021 - Market Watch)
    Bond guru Jeffrey Gundlach of DoubleLine Capital said it is no mystery why U.S. Treasury yields are anchored lower despite evidence that inflation is rising in an economy attempting to rebound from a stultifying pandemic.
    [visit article]
  47. NewsWatch: When the Fed finally steps back, can the U.S. stock and bond markets stand on their own legs? (12/09/2021 - Market Watch)
    Expectations are rising for the Federal Reserve to follow in the footsteps of the European Central Bank and announce plans to reduce its $120 billion cache of monthly bond purchases.
    [visit article]
  48. Rising US bond yields spook Sensex, Nifty; Dalal Street bracing for massive foreign fund outflows? (01/04/2021 - Financial Express)
    If the US Treasury yields continue to rise, inflation continues to climb, and an improving economy pushes central banks to change policy stance, then it may lead to massive foreign fund outflows, forcing India’s share market into further correction.
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  49. NewsWatch: S&P 500 scores best day gain in about 9 months, as March kicks off with brighter economic outlook (01/03/2021 - Market Watch)
    U.S. stock-market benchmarks closed sharply higher Monday, with some strategists attributing the enthusiasm to a cool-down of last week's rapid rise in bond yields that had unsettled the bullish mood on Wall Street.
    [visit article]

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