Authorization

A CIO who earned up to 90% per trade during last year's crash is now warning of a potential 20% crash in the S&P 500 by the end of March as 10-year Treasury yields continue to rise

A CIO who earned up to 90% per trade during last year's crash is now warning of a potential 20% crash in the S&P 500 by the end of March as 10-year Treasury yields continue to rise

A trader on the New York Stock Exchange looks at stock rates on October 19, 1987.
MARIA BASTONE/AFP via Getty Images




10-year Treasury yields have risen to their highest levels since before the pandemic in recent days.




James McDonald, CIO at Hercules Investments, told Insider he expects yields to continue rising.




He said they could rise to 2.5% by the end of March and trigger a 20% sell-off in the S&P 500.




Visit the Business section of Insider for more stories.


Yields on 10-year Treasury notes have spiked to a one-year high over the last month, rising above 1.5% as COVID-19 cases fall and vaccinations continue - positive developments for the economic recovery ahead. The surge has spooked equity investors, who sold off mega-cap tech stocks this week and dragged the S&P 500 down 1.4% and the tech-heavy Nasdaq 100 down 3.4%.According to James McDonald, chief investment officer of the alternative asset manager Hercules Investments, the bleeding isn't likely to stop anytime in the coming weeks.That's because higher bond yields can start to pull investors looking for a certain level of returns away from stocks - a headwind for equity markets, particularly for the most highly valued growth names. Yields rise when demand for bonds fall. And this week, the bond market quaked at signs that the economy's recovery would be strong enough to lift inflation and Fed-administered interest rates.
See also:
Leave a comment
News
  • Latest
  • Read
  • Commented
Calendar Content
«    Апрель 2021    »
ПнВтСрЧтПтСбВс
 1234
567891011
12131415161718
19202122232425
2627282930