Volatility Spikes with Rising Rates
Share
Share
The past two weeks have proven to be turbulent for most asset classes, save for a few widely held and widely traded commodities like lumber, copper and oil.
Heading into last weekend the final couple of trading days of February bonds, gold and high price-to-earnings (P/E) growth stocks got crushed. Even Bitcoin has shed 25%, its worst week in a year, in what has been a wild ride, but a bullish one for those that can withstand huge price swings amid the bouts of “risk off” trading.
That ride has stalled out, at least temporarily, as the dollar has stabilized. Treasury Secretary Jane Yellen also poured cold water on the hot digital gold currency with her latest commentary.
Last weeks sharp move in the 10-year yield unsettled the stock market.
However, Gargi Chaudhuri doesn t expect nominal interest rates to return to pre-pandemic levels.
She explains why, and shares three areas of the market that have already gained traction.
Last week, the stock market came under pressure as rising bond yields sparked a volatile end to February.
However, US stocks came out strong on Monday, with all three major indexes bouncing back from last week s losses. On Monday morning, the Dow kicked off with a 2% spike, while the S&P 500 climbed around 1.9%. The Nasdaq enjoyed a 3% gain in response to the fall in bond yields and the passing of Biden s $1.9 trillion spending package.
March 1, 2021
Inflation fears showered the markets with sell-offs last week, but some analysts aren’t fretting. Investors still spooked by the possibility of rising inflation can turn to the
“Mad Money” host Jim Cramer saw the recent sell-offs as a general overreaction:
“The bond market sees the economy getting ready to reopen … and it figures the last thing we need is more stimulus,” said Cramer. “To these bond investors … that’s like throwing gasoline on the Kingsfords. They think the economy will overheat … [and that]we’re going to get some serious inflation.”
As fears of inflation permeated the markets, growth names received the brunt of the blow. In a meeting with the House and Senate, Federal Reserve Chair Jerome Powell remained steadfast in keeping rates low.
Boom bei Aktionärszahlen: Wie treu sind Börsenneulinge ihren Aktien? n-tv.de - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from n-tv.de Daily Mail and Mail on Sunday newspapers.