Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 15, 2023. REUTERS/Brendan McDermid/File Photo Acquire Licensing Rights
A look at the day ahead in U.S. and global markets from Mike Dolan
Both long-term borrowing rates and riskier growth stocks of the Big Tech universe have climbed in tandem this week, a peculiar coincidence in price trends that typically offset each other.
While it’s often dangerous to over-interpret a few days of market developments, some argue investors are gradually pricing a more durable high-pressure economy ahead – one where demand and earnings growth stay brisk and keep credit policy and interest rates tight over the horizon.
Or it may just be a series of idiosyncratic news events.
Either way, it was enough to hand Wall St stocks (.SPX) their best day of the month on Monday just as 10-year Treasury yields eye recent 15-year highs again above 4.3% ahead of today’s auction of new 10-year paper.
Although both stock futures and bond yields edged back a touch again on Tuesday ahead of the bell, the fact they are moving in tandem ahead of a critical week for macro policy is notable.
Curiously, it was the traditionally most interest-rate sensitive sectors that led Monday’s stock rally, with the NYFANG+ index (.NYFANG) of mega cap tech and digital giants clocking a daily gain of more than 2% for the first time in September.
That jump was led by Tesla’s 10% surge (TSLA.O) after Morgan Stanley upgraded its stock…
