A combination of stronger economic growth, declining interest rates, and expectations that the economy will get even better pushed the U.S. stock markets to another set of record highs this week. As fears of higher bond yields continue to fade, sectors that do well under lower interest rates took off this week. Commodities in general came back in favor and even the greatest laggard of all—gold—saw some fresh demand. That’s right, the precious metal I least favored at the beginning of the year actually came to life, although it has a long way to go before recapturing its former luster….
Insights & Advice
Tag: bond yields
Tech stocks rise from the dead
The large cap technology sector bounced back this week as bond yields fell. It is a see-saw market filled with several cross-currents. But if you want to know where stocks are going, keep your eyes focused on the U.S. Ten-Year Bond yield. In my last column, I explained how rising bond yields are like kryptonite to the continued performance of what I call “super tech stocks.” During the last two weeks, the NASDAQ 100, for example, experienced a 10%-plus down draft, as bond yields rose to 1.60% from 1.25%. Investors sold FANG stocks, and technology shares in new-era sectors, like…
CAPITAL IDEAS: Stock market heat
“I gotta hold on to my angst. I preserve it because I need it. It keeps me sharp, on the edge, where I gotta be.”—Vincent Hanna Question: Hey, Allen, the stock market has been hot, and now it’s overvalued. Why do you remain invested? That’s a question I was asked recently. And by recently, I mean almost every week for the last few months. When asked that question, I actually want to answer a different question. I don’t want to answer “why,” I want to answer “how.” The answer is “apprehensively.” Today the stock market reminds me of the two…