T-bond yields close levels that will lead to an ‘outright sell-off’ in equity marketsPosted on 09 January 2014 with 1 comment from readers
Watch out it’s behind you! The biggest problem for equity markets in 2014 is the fact that treasury bond interest rates have doubled since May last year and look to be heading higher as the Fed cuts back on money printing in 2014.
UBS top analyst Art Cashin says CNBC viewers and users need to keep watching the yield on the 10-year US note. He told CNBC’s Bob Pisani after after the Federal Reserve released the minutes from its December policy-making meeting, ‘if we get up around 3.15 per cent they’ll start to put a little further pressure on stocks. And 3.25 can bring outright selling, I think.’
Mr. Cashin said the Fed minutes indicate the central bank’s staff is getting more optimistic about the economy’s future, which could mean a quicker tapering, but ‘with no disrespect intended, however, the Fed staff is historically very poor at forecasting’. The risk is that the Fed will crash the stock market and then have to reverse course on tapering QE…