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Rates are up, stocks are down
Yesterday's Fed announcement and Powell's presser briefly paused the bond selloff, but markets are back on it again today.
The U.S. 10 year yield breached the 1.75% level earlier and Nasdaq futures are down by ~1.7% ahead of the cash open.
Rising rates is not a good environment for tech stocks...
Tech stocks are 'long duration assets' - lower interest rates = lower discount rate (future earnings become worth more in today’s money).
Higher rates & inflation chip away at the value of those future earnings, so it's easy to see why tech stock valuations are under pressure of late...
More Central Bankery
It wasn't just the Fed...
“Since the Monetary Policy Committee’s previous meeting, the news on near-term economic activity had been positive, although the extent to which that news changed the medium-term outlook was less clear,” the BoE said after its March policy meeting.
“Different MPC members placed different weights on the balance of risks around the outlook.”
“In the committee’s current assessment of the outlook and balance of risks, the policy rate will most likely be raised in the latter half of 2021,” Norges Bank said in a statement. “This implies a somewhat faster rate rise than projected in December.”
Turkey’s central bank hiked rates by 200 basis points to 19% on Thursday, twice the market expectation in what it called a “front loaded” move to head off rising inflation and a sliding lira, which rallied nearly 2% in response.
🔥 Hot or 🚫 Not
🔥 AMC Theatres are reopening, with 98% of their locations across the U.S set to open their doors from tomorrow...
Possibly one of the ugliest charts you will ever see
🚫 The Electric Vehicle boom is over
There's been plenty of froth in the EV markets, and now the big guns are coming to compete...
- Nikola have been hit by news that Hanwha Corp is looking to sell half of their stake in the company
- Lordstown have been targeted by Hindenburg Research, accusing the company of using “fake” orders to raise capital - the SEC are now requesting more information...
Their stock is down nearly 10% on the day...