Markets today: stocks down less than 1%, oil up 6%, 10-year Treasury yield up 11 bps.
That's actually impressive resilience. Two things are holding:
1. Strong earnings. Companies are printing money, so people aren't panicking about valuations yet.
2. Rate risk hasn't bled into credit risk. Higher yields haven't broken anything — no forced deleveraging, no credit crunch, no cascade.
But this is fragile. Watch what happens if:
• Higher yields start slowing the real economy
• Financing dries up (especially for weaker credits)
• Leveraged players get margin calls and start dumping
Right now, the market is shrugging off rates because earnings are fine and nothing's broken. That can change fast. The question isn't whether rates are high — it's whether they stay high long enough to matter.
Stay patient. Don't fight the tape, but don't assume resilience = invincibility.
That's actually impressive resilience. Two things are holding:
1. Strong earnings. Companies are printing money, so people aren't panicking about valuations yet.
2. Rate risk hasn't bled into credit risk. Higher yields haven't broken anything — no forced deleveraging, no credit crunch, no cascade.
But this is fragile. Watch what happens if:
• Higher yields start slowing the real economy
• Financing dries up (especially for weaker credits)
• Leveraged players get margin calls and start dumping
Right now, the market is shrugging off rates because earnings are fine and nothing's broken. That can change fast. The question isn't whether rates are high — it's whether they stay high long enough to matter.
Stay patient. Don't fight the tape, but don't assume resilience = invincibility.
