Fundamentally, The US is delivering the strongest fundamentals when compared with its counterparts across the world. Plus the recent data have been little under expectation but that won't deteriorate/dissipate the hope for the investors, I think. Also, this will keep the dollar bid, especially USDJPY . Now thinking logically, the yields will increase when the bond prices go down and bond prices go down when the enormous amount of supply is available in the market. Hence, the recent trade tensions between the US and China is already causing a big ruckus in the global stock market.
Given the fact, China is the largest creditor of the US and it holds 1.3 trillion worth of US government bonds. what if they dump it via tranches? That would only make people buy it because mechanically, Bond prices are inversely proportional to yields. Therefore, the more T-Notes we have in the market, the less valuable they could be but simultaneously, we could see a ginormous rally in the yields. Ultimately, the US Treasury may buy back to control the yield or soverign nations would step in to cover it up. Overall, we could see the 10Y rising to at least 4 /5%. Now that could tank the stock market. it will be a real problem. Until then, buy the dips will continue, I think. SPX will easily reach 3500, I think with DOW surpassing 30k .. for some, this could be an irrational number. but hey, look no one saw even 25k on DOW.. but we still rode above that.
Technically, The 10 Y yield just broke out of its multi-decade trend line and its merely retesting it. PLus the recent leg up`s 50% pullback comes at/near the trendline which gives an added confluence and simply by the rules of Fibonacci and measurement of ABCD format, we could test 4 % on US10Y
Given the fact, China is the largest creditor of the US and it holds 1.3 trillion worth of US government bonds. what if they dump it via tranches? That would only make people buy it because mechanically, Bond prices are inversely proportional to yields. Therefore, the more T-Notes we have in the market, the less valuable they could be but simultaneously, we could see a ginormous rally in the yields. Ultimately, the US Treasury may buy back to control the yield or soverign nations would step in to cover it up. Overall, we could see the 10Y rising to at least 4 /5%. Now that could tank the stock market. it will be a real problem. Until then, buy the dips will continue, I think. SPX will easily reach 3500, I think with DOW surpassing 30k .. for some, this could be an irrational number. but hey, look no one saw even 25k on DOW.. but we still rode above that.
Technically, The 10 Y yield just broke out of its multi-decade trend line and its merely retesting it. PLus the recent leg up`s 50% pullback comes at/near the trendline which gives an added confluence and simply by the rules of Fibonacci and measurement of ABCD format, we could test 4 % on US10Y