As US 10-year bond yields spike higher, stocks are finally creaking under the pressure.
I have been consistently warning about the possibility of a sharp sell-off in the S&P 500 for the last few months and it looks like we are getting closer to a serious shift in momentum to the downside.
The monthly sell pivot was confirmed last month from a major sell zone so the risk is high that a failure below the 200 day moving average could see selling pressure increase.
You know more than me what happened in the US last night because I’m writing this on Friday, but I wouldn’t be surprised if it was another serious down night.
If it didn’t crack last night, I reckon it will do so soon.
Japanese government bonds continue to sell off with the 10-year yield jumping from 0.40% to 0.83% over the last few months. Is that an accident waiting to happen?
US commercial real estate is under pressure again as long-term rates rise. If we see problems there, US regional banks will take another hit.
As always it is difficult to know what will break and often it is something from left field, but the higher rates march the closer we are to an accident.
US stocks have been incredibly resilient for the last few months as rates rose, but I think that is about to change.
Check out my Closing Bell video above where I update you on my bearish call on the S&P 500 and ASX 200 and show you what could be coming next if the selling continues.
Regards,
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Murray Dawes,
Editor, Money Weekend
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