As we move through the final trading days in the first month of 2018, this is what has everyone worried today.
A Big Problem For Markets
By Peter Boockvar, author of the Boock Report
January 29 (King World News) – Here is what Peter Boockvar wrote as the world awaits the next round of monetary madness: It is not just interest rates that continue to rise, inflation expectations are rising with them. The implied inflation rate in the 10 yr TIPS today is at 2.11%, up to 2 bps to the highest level since September 2014…
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Boockvar continues: “The bond selling started in Asia overnight with the Japanese 10 yr yield in particular up 1 bp to .09%, matching the highest level since July. Europe was next with the German bund yield up almost 6 bps to .68%, last seen in November 2015 on a closing basis.
With US Treasuries, the next big stop to watch in the 10 yr yield is 2.80% where it was in April 2014 and 3.03% above that which marks where it stood on the last trading day of 2013 and which was the highest yield since July 2011. When this all matters for stocks is the $64k question (I have no idea), which it will at some point as we marry historically high equity valuations with a rising risk free rate and cost of capital.
Chart of the breakout…
Wondering what all of this looks like in chart form? Tom Fitzpatrick was kind enough to reach out to KWN and had this to say about the situation: “The sustained close above 2.64% on US 10s (10-Year Treasuries) confirms the break higher seen the week prior and suggests higher levels from here (and so far we have seen a good move overnight). This now opens the way towards 3-3.05%.” (see chart below).
Boockvar is correct to ask, when will this matter for stocks? The answer is we’ll soon find out. Presently the dollar is attempting a rally and stocks are drifting lower at mid-day.
***ALSO JUST RELEASED: ALERT: China Is About To Reintroduce Gold Into The World Monetary System CLICK HERE TO READ.
***KWN has just released the powerful audio interview with Gerald Celente discussing why the world is heading into a major crisis in 2018 and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
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