[WATCH] Closing Bell — A Unique Trend Change in a Generation

In today’s Money Weekend, I explore why the moves we’re seeing in bond yields around the world are incredibly important. Where are we going? Find out below…

When you’re a keen observer of the markets, it’s easy to get caught up in daily fluctuations and forget about the big picture.

It’s extremely rare to see a change in a four-decade trend, so we rarely contemplate such a thing.

In today’s Closing Bell video, I start by showing you a 100-year chart of US 10-year bond yields.

You will clearly see the shifts in long-term trends over this period and should come away with a deeper appreciation of the significance of the movements we are seeing in bond yields around the world.

I have often spoken of the severity of the break above 3.5% in the US 10-year bond rate. And I warned you that yields could climb at a rapid rate above there as forced liquidations take hold.

It appears to be taking shape, with the yield climbing to 4.23% over the past five weeks. There is no sign of a reversal, and this is a major breakout, so yields could surprise on the upside, putting downward pressure on stocks.

Equities have done quite well in the face of rising yields over the past month. However, the technical picture is still bearish and another lower leg can trigger a serious downward chain reaction.

Elon Musk said the Fed was looking at inflation in the rear view mirror and he saw more signs of deflation than inflation at Tesla. Many commentators say the Fed will raise rates too far, too fast and cause a hard landing.

Without any signs from the Fed that it is easing its hawkish stance soon, the charts indicate that we are headed for high volatility, so the name of the game remains capital preservation above all else.

Cheers,

Murray Dawes,
Editor, silver weekend