| Author | Message | ||
     Entrepreneur Kurra Bewarse Username: Entrepreneur Post Number: 3379 Registered: 05-2011 Rating: N/A |
U.S Market Status: Current Status: Market in Correction 1. The stock market began its precipitous descent midday Thursday after the Fed's Powell said last week's surge in bond yields "caught my attention." But Powell also said that the Fed remains highly accommodative and didn't hint at a new "twist" in policy. The 10-year Treasury yield spiked, closing at 1.55%. 2. The Nasdaq dived below last week's lows, closing at its lowest level since Jan. 4 and turning negative for the year. The tech-heavy composite is down 1.3% in 2021 after rallying as much as 10% from Jan. 1 to its Feb. 16 record high. WallStreet: Anything 10% drop from top is a CORRECTION. 3. Why increase in yield Matters: That matters greatly for a variety of reasons: If spending accelerates, GDP growth will, too. If GDP growth accelerates, earnings growth and job growth should, too; however, the risk of higher inflation also increases. If higher inflation is seen (or feared), higher long-term rates should follow. If long-term rates increase and profit margins are squeezed, stock market valuations will be called into question. |