The S&P 500 index is at a negative record (photo by shutterstock, edrod /freeimages)
The 10-year US government bond yields crossed the 3.2% threshold tonight, and this is their highest level since January 2021, which is a significant figure. In principle, when the market had already stabilized, the chairman of the Federal Reserve spoke (last Friday) and said things in the spirit Those that are in fact – clear to all: the war on inflation is not over, the interest rate will continue to rise and will not fall so quickly.
It didn’t take more than that (and the truth is, it’s a lot) for investors to start running the new data on their Excels and from there make investment decisions. There wasn’t an investment manager of medium size or higher who didn’t contribute his wisdom in the last week to some of the media in the US and among all of them the following insight passed like a second thread – we have no idea what is going on, and what to do.
More in-
When the insight is this, then the most informed investment decisions that can be made are to sell, exit the market and look for a new entry point, with good papers later.
If we treat the bond market as a market that determines the trend of trade and interest rates and in fact determines all global financing, then the American bond market is currently shaking and if we take the 10-year government bond that should be the major balance sheet of the bond market And hence the global economy, this market does not find a bottom.
The working assumption at the moment among the American investment bankers who are interviewed by the media in the “Big Apple” is that they are currently starting to see the opportunities that are created in the market when the general direction is still downward. The consensus speaks of stable and large companies that distribute high dividends, as stocks that have stabilized the market, but even here they still cannot find a bottom. And in short, to quote the investment bank Julius Baer, they are currently urging their clients to keep a high cash component in their portfolio, at least until the lack of loans fades away, and it won’t happen that quickly.
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