The 10-year real yield just hit its highest level since the 2008 financial crisis.
Real yields (inflation-adjusted returns) are now at levels we haven't seen in over 15 years. This matters because:
• Higher real yields make bonds more attractive vs stocks
• Growth stocks and unprofitable tech get hit hardest
• It signals the market expects rates to stay higher for longer
• Borrowing costs for companies and consumers stay elevated
We're in a completely different rate environment than the 2010s. The days of free money are over. Companies with weak cash flow and high debt loads will feel the pressure.
Watch how the market digests this. If real yields keep climbing, we could see more rotation out of speculative plays into value and dividend stocks.
Real yields (inflation-adjusted returns) are now at levels we haven't seen in over 15 years. This matters because:
• Higher real yields make bonds more attractive vs stocks
• Growth stocks and unprofitable tech get hit hardest
• It signals the market expects rates to stay higher for longer
• Borrowing costs for companies and consumers stay elevated
We're in a completely different rate environment than the 2010s. The days of free money are over. Companies with weak cash flow and high debt loads will feel the pressure.
Watch how the market digests this. If real yields keep climbing, we could see more rotation out of speculative plays into value and dividend stocks.