TNX is firmly above 4%, and the rise in rates will continue. For the first time in 40 years both the Stock and Treasuries are going down, which is detrimental to the long-term investment portfolios worldwide. The investments that seemed protected, diversified - split between Stocks, Bonds, Treasuries - all of a sudden start to move sharply lower. Social security, retirement savings - all begin to evaporate. The world, however, does not seem to pay attention: AAPL still trades at 0.6..0.7% dividends yield.
It will take much more of the move in Treasuries to force everyone to take notice. I think 7% for TNX is a very conservative target. 8-10% in the apogee of the panic look more realistic.
The rise in yields to the figures above will lead to the "impossible three" in the next few months:
1. SPX below 1500
2. EURUSD at or near 0.75
3. USDJPY at 100..110
Real-world side effects: the sudden bankruptcy of the "developed" world will imply their defeat in Ukraine. Nobody from US or EU will send any more weapons or money while there is financial apocalypse at home.
It will take much more of the move in Treasuries to force everyone to take notice. I think 7% for TNX is a very conservative target. 8-10% in the apogee of the panic look more realistic.
The rise in yields to the figures above will lead to the "impossible three" in the next few months:
1. SPX below 1500
2. EURUSD at or near 0.75
3. USDJPY at 100..110
Real-world side effects: the sudden bankruptcy of the "developed" world will imply their defeat in Ukraine. Nobody from US or EU will send any more weapons or money while there is financial apocalypse at home.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.