Bond Market Sends Warning -Earnings MSI, VNR, KBL, CGX, CBL, Preferred Shares
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Bond markets delivered a stern warning last Friday, demonstrating the power interest rates have on stock valuations. Nothing new about this, there have been several periods since the early 1980's when rates moved higher to cool economic growth, only to give back the rate increases and then some.
A notable difference from previous periods when central banks raised interest rates has been the almost haltingly slow pace of increases. It has taken four years for the US central bank to increase rates by barely 1%.
Last week's update noted the technical importance of US 10 year bond yields rising higher than at any time since Trump arrived on the political scene; and the risk this poses to markets. Periods of rising bond yields also provide opportunities for income focused investors to put money to work.
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