Higher Bond Yields And Lower Earnings Forecasts Are a Toxic Mixture for Stocks.
The stock market is starting to wake up to the fact that bond yields are rising again and that earnings forecast are falling in a significant way. This means market volatility is going to catapult higher in the days and weeks ahead.
Table of Contents:
1) Higher yields and lower earnings are a toxic combination for an overvalued stock market.
2) Since the stock market is still very expensive, a “soft landing” will not prevent a further decline.
3) There HAVE been some very bullish technical developments recently, but………
4) It won’t take much more downside follow through to confirm a change in trend for the SPX & NDX.
5) Investment grade bond investors have got to be getting nervous after the recent action in that market.
6) If Microsoft (MSFT) falls much further, it’s not going to be good at all for the stock market.
7) We’re watching S. Korea’s KOSPI Index for clues about China & China’s stock market.
8) The European banks stocks have become very overbought…and thus they’re ripe for a pullback.
9) Bitcoin stands at a CRITICAL juncture on a technical basis.
10) Summary of our current stance.