Latest news with #US10Y
Yahoo
23-05-2025
- Business
- Yahoo
Markets Hit a Ceiling, Says Fidelity's Timmer
Equity markets aren't priced for a slowdown, says Fidelity's Timmer, even after sharp swings. Jurrien Timmer, Fidelity's director of global macro, told CNBC that despite recent tariff-induced volatilitywhere the S&P 500 plunged 21.5% then rebounded 23%markets have established boundaries beyond which declines have been rolled back. He sees 2025 delivering moderate earnings growth offset by value pressures coming mostly from the interest rate side, with the 10-year Treasury (US10Y) yield at 4.5% competing directly with equity yields around 4.55%. Chicago Fed President Austan Goolsbee warned that tariff hikes could spur a stagflationary impact, hurting output and lifting pricesthe central bank's worst situation. Timmer noted tariffs act like a tax, paid either by companies via thinner margins or by consumers through higher costs. He added that both earnings and GDP estimates have been marked down, though not significantly worse than typical intra-year adjustments. Timmer argues the market now faces a ceiling: It's either rates driving down valuations or earnings driving down estimates from tariffs. He highlighted the tug-of-war between bond yieldsUS2Y, and equity benchmarks like The Dow Jones Index, complicating the outlook. Why It Matters: With fiscal and trade risks capping both valuations and earnings, investors must balance duration and equity exposure. This article first appeared on GuruFocus. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
23-05-2025
- Business
- Yahoo
Markets Hit a Ceiling, Says Fidelity's Timmer
Equity markets aren't priced for a slowdown, says Fidelity's Timmer, even after sharp swings. Jurrien Timmer, Fidelity's director of global macro, told CNBC that despite recent tariff-induced volatilitywhere the S&P 500 plunged 21.5% then rebounded 23%markets have established boundaries beyond which declines have been rolled back. He sees 2025 delivering moderate earnings growth offset by value pressures coming mostly from the interest rate side, with the 10-year Treasury (US10Y) yield at 4.5% competing directly with equity yields around 4.55%. Chicago Fed President Austan Goolsbee warned that tariff hikes could spur a stagflationary impact, hurting output and lifting pricesthe central bank's worst situation. Timmer noted tariffs act like a tax, paid either by companies via thinner margins or by consumers through higher costs. He added that both earnings and GDP estimates have been marked down, though not significantly worse than typical intra-year adjustments. Timmer argues the market now faces a ceiling: It's either rates driving down valuations or earnings driving down estimates from tariffs. He highlighted the tug-of-war between bond yieldsUS2Y, and equity benchmarks like The Dow Jones Index, complicating the outlook. Why It Matters: With fiscal and trade risks capping both valuations and earnings, investors must balance duration and equity exposure. This article first appeared on GuruFocus.
CNBC
16-05-2025
- Business
- CNBC
The bond market is running the show again. The key level to watch
It's the bond market's world, and equity investors just live in it. The 10-year Treasury note yield staged a big reversal this week, giving a boost to stocks. The benchmark rate spiked higher to start the week after the U.S. and China agreed to lower tariffs for 90 days. Midway through the week, though, some trepidation entered investor sentiment, as the 10-year hovered around the key 4.5% level. But the rate quickly fell back below that level on Thursday — helping the S & P 500 post a four-day winning streak. The yield fell again on Friday to around 4.39%. US10Y 1M bar 10-year U.S. yield in past month Investors going forward should keep an eye on the 10-year, especially if it tries to break back above 4.5%. "S & P 500 daily returns have started to meaningfully weaken when the 10-year Treasury yield has increased above 4.5% since 2021 (in this rate cycle)," wrote Tavis McCourt, institutional equity strategist at Raymond James. He pointed out that the S & P 500's annualized returns have dropped to just 1% when the 10-year yield trades above 4.5%. That's compared to 10.4% with a yield below 4.4%. When the 10-year yield trades under 4.3%, the S & P 500 averages a return of 19.6%. Returns for mid- and small-cap stocks are even worse when the 10-year yield tops 4.5%. On an annualized basis, the S & P Midcap 400 loses 16.6% on average under such high yields, while the S & P Small Cap 600 loses 18.4%, McCourt pointed out. Elsewhere Friday morning on Wall Street, Loop Capital raised its price target on Meta Platforms to $888 from $695, implying more than 30% upside. "While our pre-quarter checks had pointed to resilience, our expectation that a drop in spending intensity from China-based advertisers would flatten revenue growth was a misread," analyst Rob Sanderson wrote in a Thursday note. "This large spending cohort has backed off (with some geographic reallocation) but AI-driven performance gains across the platform are more than an offset."
Yahoo
12-05-2025
- Business
- Yahoo
S&P 500, Nasdaq Hit Multi-Week Highs as U.S.- China Agree to 90-Day Tariff Pause
U.S. stocks climbed sharply Monday morning after Washington and Beijing agreed to a temporary suspension of most tariffs, easing trade tensions between the world's top two economies. The Nasdaq Composite rose about 3.5%. The S&P 500 gained nearly 2.5%, while the Dow Jones Industrial Average was up 2%. Yields also pushed higher. The 10-year Treasury yield (US10Y) rose 8 basis points to 4.47%, and the 2-year (US2Y) added 10 basis points to 4.01%. The agreement includes a 90-day pause in tariff hikes. The U.S. will cut its duties on Chinese goods to 30% from 145% by May 14. In response, China plans to lower its levies on American products to 10% from 125%. The move follows last week's modest market pullback and comes ahead of key U.S. data releases, including consumer and wholesale inflation figures for April. Deutsche Bank's Jim Reid noted that optimism around renewed diplomacy, including potential talks in Switzerland, contributed to the broader risk-on sentiment heading into the week. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
01-05-2025
- Business
- CNBC
April was rocky for Treasurys, but here's why investors should stick around
April was stormy for equity investors, but even retail investors holding onto Treasurys went on a wild ride – complete with sharp price swings. President Donald Trump's "reciprocal" tariff rollout on April 2 and subsequent suspension of higher rates spurred volatile trading in stocks. At one point, the S & P 500 briefly slid into a bear market , dropping more than 20% from its February record, before dialing back its losses as retail investors bought the dip. The broad market index ended Wednesday – the final trading day in April – about 9% off its record close. .SPX 1M mountain The S & P 500 over the past month On the fixed income side, the 10-year Treasury yield initially dropped upon the rollout of Trump's slate of tariffs, but then surged in a matter of days , with the rate surpassing 4.5% on April 9. The 10-year Treasury yield traded at about 4.2% on Thursday. Bond yields and their prices move inversely to each other. That means last month investors were watching their safe Treasurys come down in value just as they were facing paper losses on the equities side of their portfolio. "We have a lot of volatility in the markets right now," said Kathy Jones, chief fixed income strategist at Schwab Center for Financial Research. "I don't have doubts about the full faith of the government in paying [Treasurys] on time, so if it's part of an overall plan, you don't need to change that," she added. Hang tight In much the same way it would be irresponsible to dump your stocks and flee to cash in the middle of a sell-off, holders of individual bonds – Treasurys in particular – ought to sit tight. Treasurys are backed by the full faith and credit of the government. They're high in quality, and the income they pay is exempt from state and local taxes (but subject to federal levies). Investors holding individual Treasurys, be they bonds, notes or bills, can count on receiving interest payments. Even as their value may fluctuate during tumultuous markets or when interest rates change, bondholders can count on receiving their interest income twice a year and their par value at maturity. US10Y 1M mountain The U.S. 10-year Treasury yield in the past month "If you hold the individual Treasurys, ideally you're aligning your goals with the maturity date, and if you hold them until then," they're paid back in full, said Catherine Valega, certified financial planner at Green Bee Advisory. Market gyrations may be a little tougher for bond fund investors to ride out, however. In this case, you get the benefit of diversification and lower costs, but you will see regular fluctuations in prices. Investors don't have control over the maturity of the underlying issues, either. In tumultuous times, bond fund investors have to remember their priorities. "One of the things we tell people when they invest through funds is 'What is your time horizon for investing in this fund?'" said Jones. "If it's five years, don't react if the price comes down in six months." "It's often hard with funds," she added. "The way they're reported, people don't see accumulated income or the value of the income received. People see the price come down, sell and lock in the loss, and then they haven't had the accumulation you'd get from holding the fund." More rocky times ahead It's only May, but investors can expect more volatility to come for both stocks and bonds, especially as White House tariff policy unfolds, swinging the economy along the way. Be mindful of your plan and time horizon : Check in with your financial advisor to ensure that your portfolio still reflects your risk appetite and time horizon. Avoid knee-jerk reactions, whether it's dumping stocks or losing sleep over your bond portfolio. Stay high in quality: Keeping an eye on credit quality will give you peace of mind. "If we do run into a recession or a downturn in the economy, where it will be felt in the bond market is in high yield and emerging market bonds where quality is more questionable," said Jones. Keep some cash handy: The most conservative part of the portfolio for Valega's clients includes high-yield savings, certificates of deposit and Treasury bills. These instruments are short term and not subject to price fluctuations as in long-dated bonds. "The further you go out on the maturity curve, the more volatility you risk," Valega said.
