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17 September 2021
20:52 hour

NewsWatch: Stock market crash? No, but rising bond yields are sparking a nerve-racking rotation below the surface

Market Watch

04/03/2021 - 23:01

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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Related headlines:

  1. NewsWatch: 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.
    [visit article]
  2. 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.
    [visit article]
  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.
    [visit article]
  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.
    [visit article]
  5. Market Extra: Stock market crash? No, but a rotation away from U.S. tech stocks is shaking up some investors (04/03/2021 - Market Watch)
    Social media to the contrary, 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.
    [visit article]
  6. 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]
  7. NewsWatch: Does the bond market have it wrong about inflation? (18/07/2021 - Market Watch)
    Beneath the surface of a relatively sanguine U.S. government-bond market is an undercurrent of worry.
    [visit article]
  8. 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.
    [visit article]
  9. 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.
    [visit article]
  10. 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.
    [visit article]
  11. 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.
    [visit article]
  12. Why I don't believe the market will crash in the next week or two (27/02/2021 - Reddit Stocks)
    Let me start by saying that I am a bear, and believe this market will implode spectacularly rising bond yields across the globe have a much bigger effect than people think, but I don't think we are crashing today of right now. I really can't see the market crashing before the stimulus or before reopening, however a forward looking market needs something to look forward too, and once the stimulus has passed and we have reopend, that's when I'd be worried. Also bubbles pops always happen after the most ballistic period, I mean the market goes nuts look at dot com, Japan, South sea. And we haven't seen that yet with this bubble. if you are new I would hold and don't panic sell, if you are invested for the long term crash or no crash you will do well.   submitted by   /u/ilai_reddead [link]   [comments]
    [visit article]
  13. Market Extra: Bond markets have ‘never been so sensitive’ to a Treasury yield surge (16/02/2021 - Market Watch)
    The sharp rise in long-term bond yields since January is sparking jitters on Wall Street, as fixed-income markets increasingly become vulnerable to a surge in interest rates.
    [visit article]
  14. 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.
    [visit article]
  15. 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.
    [visit article]
  16. 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.
    [visit article]
  17. Stock Market Isn't Overvalued - Bond Rates at all time lows, Stimulus coming (27/02/2021 - Reddit Stocks)
    1st point: Recently did some research for a college course where I analyzed the Buffett Indicator. For those unfamiliar with the metric, it divides total stock market cap by current US GDP. According to Indicator, the market is overvalued higher than it ever has been. However, if you calculate the correlation between the 10-Year US Treasury bond and the Buffett Indicator over the last 50 years, they are negatively correlated with a coefficient of -.9 (-1 would be perfectly inversely related). Basically, when bond yields are low, the Buffett Indicator (and stock valuations) are higher. If you look at the data from the ".com" bubble in 2000, bond interest rates were still at 6% (average for last 50 years) which means low yields weren't what was juicing the market. We are not in a similar situation as back then. Currently, bond yields are at all time lows and investors have no choice but to put money into stocks if they want a decent return. As low as rates remain at all time lows, the stock market isn't about to crash. 2nd point: More stimulus checks are on the way. While there are many Americans that need this stimulus for everyday expenses, there are also millions of financially stable people who will be getting the stimulus even though that don't need it. Where do you think all this money will be going? If I had to bet it's mostly going into the stock market. Summary - Quit listening to fear mongers talking like the market is about the crash. Even if it corrects 10%-20% we will be fine. The data backs this up. The best time to invest for the long term is and always will be right now. Get in the market and dollar-cost average is it starts to fall (which I don't see a major fall happening until bond rates increase significantly). Current Market Valuation - Buffett Indicator   submitted by   /u/Healthy-Cash8610 [link]   [comments]
    [visit article]
  18. 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.
    [visit article]
  19. 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]
    [visit article]
  20. 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.
    [visit article]
  21. 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]
    [visit article]
  22. 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]
  23. 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]
  24. 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.
    [visit article]
  25. 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.
    [visit article]
  26. 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.
    [visit article]
  27. 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.
    [visit article]
  28. Sector rotation before a market crash. As you may know we've seen a rotation out of energy and into staples, utilities and finance. (03/03/2021 - Reddit Stock Market)
      submitted by   /u/Split555 [link]   [comments]
    [visit article]
  29. 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.
    [visit article]
  30. 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]
  31. 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.
    [visit article]
  32. 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]
  33. 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]
  34. NewsWatch: Why it’ll take more than easy money from the Fed to keep sparking this bull market in stocks (25/04/2021 - Market Watch)
    Much depends on investors' appetite for taking risk.
    [visit article]
  35. NewsWatch: Why it’ll take more than easy money from the Fed to keep sparking this bull market in stocks (24/04/2021 - Market Watch)
    Much depends on investors' appetite for taking risk.
    [visit article]
  36. NewsWatch: Why it’ll take more than easy money from the Fed to keep sparking this bull market in stocks (24/04/2021 - Market Watch)
    Much depends on investors' appetite for taking risk.
    [visit article]
  37. NewsWatch: Why it’ll take more than easy money from the Fed to keep sparking this bull market in stocks (25/04/2021 - Market Watch)
    Much depends on investors' appetite for taking risk.
    [visit article]
  38. NewsWatch: Why it’ll take more than easy money from the Fed to keep sparking this bull market in stocks (25/04/2021 - Market Watch)
    Much depends on investors' appetite for taking risk.
    [visit article]
  39. 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]
    [visit article]
  40. 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.
    [visit article]
  41. 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.
    [visit article]
  42. 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]
  43. 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.
    [visit article]
  44. Yields? Rotation? Valuation? What's going on with the stock market? (25/03/2021 - Seeking Alpha)

    [visit article]
  45. 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]
  46. 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]
  47. 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]
  48. 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]
  49. Market Snapshot: Investors see a risk that the bond market has got it dead wrong about inflation (17/07/2021 - Market Watch)
    Beneath the surface of a relatively sanguine U.S. government-bond market is an undercurrent of worry.
    [visit article]

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