Markets Normalizing - Earnings: ENF, BIP, MIC, D, CJ
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It is not impossible for stock markets and interest rates to rise at the same time, just unsustainable. The Dow Jones hit an all-time high in early February this year. This was close to the same time as yields on US 10 year benchmark bonds hit their highest level since the last peak at 3% in Jan-2014.
Stock markets and interest rates can rise at the same time, except the longer it continues the more difficult it is to sustain. The Dow Jones Index has given up 9.4%, since interest rates peaked in early February this year. This compares to an 11.4% average decline for the IncomeResearch.ca total coverage universe. Income focused holdings tend to get a rougher ride during periods when markets start to build in expectations for higher interest rates.
In addition to the usual earnings reports, comments this week look at the trends for 10 year bond yields since early 2014 and the possibility the most recent uptick in yields starting in Sept-2017 may just about have run its course. This is compared to the timing of the retreat for the Dow Jones Index.
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