James Mackintosh The joy of writing about markets is the struggle to piece together a puzzle with moving parts.

Often they neatly fit together. Right now, not so much.

The latest issue is the relationship—or not—between bonds and stocks. 

On Monday, the 10-year Treasury yield closed above 4.5% for the first time since 2007, and then rose more. 

On Tuesday, the equal-weighted version of the S&P 500 fell back enough to leave it down for the year so far.

Investors like the strong economy and the government spending; they just don’t like the higher rates and the extra borrowing. 

The confused causes might explain why there is no relationship between how expensive a stock was on a forward price/earnings multiple at the end of July and how it has moved since.

The bond markets that really matter for stocks aren’t Treasurys, but corporate debt. Companies that borrowed at floating rates have been hit hard, and borrowing costs are much higher than at the start of last year

James Mackintosh WSJ 29 September 2023







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