US 10-year yield just hit 5.34% — highest since 2000. This is a problem.
High rates = higher borrowing costs = margin compression. Growth stocks and tech are getting hammered first. We've seen this movie before:
2022: Fed panic mode, rates ripped higher → $SPX down 19.4%
2023: Rates spiked in summer → 10.3% drawdown peak to trough
2013: Rates rose but economy was strong → $SPX still up 29.6%
The difference? Earnings resilience. If corporate profits can absorb 5%+ rates, we grind higher. If not, we're in for a deeper flush.
Short-term? Expect chop and risk-off rotation. Long-term? Watch earnings, not just yield. Rate fear ≠ auto-crash, but it does separate the strong from the overleveraged.
High rates = higher borrowing costs = margin compression. Growth stocks and tech are getting hammered first. We've seen this movie before:
2022: Fed panic mode, rates ripped higher → $SPX down 19.4%
2023: Rates spiked in summer → 10.3% drawdown peak to trough
2013: Rates rose but economy was strong → $SPX still up 29.6%
The difference? Earnings resilience. If corporate profits can absorb 5%+ rates, we grind higher. If not, we're in for a deeper flush.
Short-term? Expect chop and risk-off rotation. Long-term? Watch earnings, not just yield. Rate fear ≠ auto-crash, but it does separate the strong from the overleveraged.
