Chart of the week: my most important post for some time

TL;DR

Rising bond yields could put significant pressure on governments and corporations, impacting their debt load and potentially affecting the stock market.

Transcript

hello it's John Burford with chart of the week for Monday the 8th of June and this could well be one of my most important posts for some time we we have a very rapidly rising stock market stock market especially in the States but I feel there's a huge elephant in the room that has not been noticed yet by equity traders and that is in the shape of v... Read More

Key Insights

• 😮 Bond yields have been rapidly rising, potentially impacting the stock market.
• 😮 Rising interest payment bills could create significant pressure on companies and governments with high debt loads.
• ❓ The author believes that the Treasury bond yield will continue to increase, despite potential Fed interventions.
• 😮 Lloyds, a bank, could benefit from rising bond yields.
• ❓ The author suggests that the recent bounce in job growth may not be sustainable and could be a temporary phenomenon.
• 😘 The jobs created in the last decade in the US have mainly been low-paying jobs, indicating a lack of a robust recovery.

Questions & Answers

Q: How have Treasury bond yields been performing recently?

Treasury bond yields have been rapidly rising, with a 50% increase in the past six weeks, indicating a significant shift in interest rates.

Q: What could be the implications of rising bond yields?

Rising bond yields could lead to a higher interest payment bill for companies and governments with substantial debt loads, potentially putting them under immense pressure.

Q: What is the author's view on the impact of rising bond yields compared to the pandemic?

The author suggests that while many focus on the pandemic's impact, the sharp rise in bond yields should also be given attention, as it can have far-reaching consequences on the market.

Q: What is the author's prediction for the Treasury bond yield?

The author predicts that the Treasury bond yield, currently at around 1.8%, will exceed 2% and reach approximately 2.5% in the near future, contrary to popular belief that the Fed will prevent this.

Summary & Key Takeaways

• The Treasury bond yield has been rapidly rising, with a 50% increase in the past six weeks, which has implications for companies and governments with high debt loads.

• The rising interest payment bill could create significant pressure on these entities, potentially overshadowing concerns about the pandemic.

• The author predicts that the Treasury bond yield will exceed 2% and reach around 2.5% in the near future, contrary to popular belief that the Fed will prevent this.