Can anyone explain in simple terms why the 10y bond yield is (supposedly) the catalyst behind the tech sell off and overall market being down?

like
Posting as :
works at
You are currently posting as works at

From what I understand, and I may be wrong, but there are a few factors - I think 2 of the biggest are:

(1) when looking at discounted future cash flows, higher rates means your DCFs will be less, so the current valuation on stocks (and this hits tech companies moreso) is lower when rates move up.

(2) higher yields makes bonds more attractive and stocks less attractive because if yields start going up then fixed income ROI is going to be a better deal than riskier stocks. Especially if the ROI on bonds beats the dividend yield on the index funds.

It's mostly number 1 above.

The growth stocks are valued on multiple of future revenue; that multiple is shrinking as the discount rate increases in accordance with risk free treasury yield rising

likehelpful

Increase in risk free return (i.e. treasury bonds) = increase in required risk premium (i.e. stocks have to perform better)

Related Posts

Anyone know if I can buy a property with less than 20% down payment in The DMV area?

like

If you have to pay back a sign on bonus do you get back the withholding on it when you file your tax returns? For instance if the sign on bonus is 10k, there si withholding on that. So you actually receive 6k (assumption). But if you leave the company you pay back 10k no? How do you get the 4k back?

like

Does anyone have a personal success story as an angel investment?

like

3% interest rate with 1% credit toward closing costs or 2.75% with 0.4% credit toward closing cost?

like

So, what will happen with GME after today’s earnings?

like

Also for newcomers who want to learn more about investing in ether, the different exchanges to use, wallets, cold storage, etc... visit the website in the comments section. There's a 50 page guide that was invaluable to me when I first got started.

like

Is there a legal way for an international student in the US to earn money on the side?

like

What stocks or funds do you invest your IRA contributions in. Just opened up my IRA last week and looking to see where to invest in.

like

I’m a 7th year corporate associate at a V50 and between my wife and I, we have amassed 300k in savings (still paying loans aggressively too but wanted liquidity and room to invest/house payment) and hopefully 400k next year when we plan to buy a home. I am a total novice with personal finance and a bit risk averse and my parents were foreign and didn’t really do the investment stuff. The money is in a regular old savings account but I want to see what’s the best way to maximize that 300k and

likesmart

Need advice on buying my first home. I recently moved to Canada and like living in downtown city vibes. I’m looking for a 2Bed and really confused if putting all my savings and 60% of salary towards mortgage payments for 1.2M condos is worth it. Does it make sense to buy condos with all those monthly fees and live in city or buy a house around GTA for much less ? Which is better from an appreciation and resale point of view ?

like

Moving from a miserable IB job for a small pay cut, but I can now actively trade without compliance giving me trouble. After rent & taxes, I’ve got about 10k per month to save; what’s the best asset allocation / distribution for a 24 year old who has a longish horizon and average risk tolerance?

likefunny

Should’ve listened to this bowl 2 weeks ago, dumped LTC and bought ETH. LTC is like being stuck in a swamp!

I need partners all over the world for any deal that can give us financial freedom. Thou my question is there some kind of free funds online. I need more knowledge on IPIP, SBLC, 2D gateways and MT709

like

People believe Bitcoin is in dip and it’s a loss it’s so funny there’s a difference between an investor and you are investing I’ll just keep making more

Post Photo
like

What is CGI 3% share purchase plan? Is it beneficial ?

like

For your $6k Roth, do you invest immediately beginning of the year of spread it out? If so, how, and is a target date fund your vehicle of choice?

like

Hi fishes,
I have 3 questions regarding Credit Suisse

1. Do we need to bring our own
laptop to work or CS will provide
same as other companies.
2. I have seen one question that we
cannot invest or trade our money
apart from Hdfc, Icici and kotak
broker, we need to close all account
within 45 days.
3. HR told that you won't get any hike
or annual bonus in this year. You will
be eligible for 2023 dec review.
Please help to answer these questions.

like

Have money invested in S&P 500, and now starting to regret not having diversified to international stocks as well. Would want to diversify now to buy a total stock market index, however since S&P 500 dropped more than that index, not sure it’s worth to crystallize losses to do that. The alternative is to stop buying S&P 500 and start buying other markets as separate ETFs, to eventually bring in line approx. with total stock market index. Any advice on the best course of action?

like

Anybody get more active in the market after GameStop? Personally I did as I’ve been using robo, etfs, and index funds but until last week I never actually picked stocks. Now, I’m finally trading and into crypto with still a longer term focus.

like

Is taking a loan out of your 401K for a down payment a good idea? Why or why not?

like

More Posts

Does anyone have any tips on how to optimize tiktok ad set, demo targeting?

Post Photo
like

How much Python and SQL should I know as a data analyst for someone who has 3 YOE ?

Where to find the project details in talent portal?

So does anyone know if tomorrow will be a recognized federal holiday? If it is I can’t bill hours… so no work…

like

Why da F was qualifying on a Friday?!? Totally missed it! Hope the race is not on a Tuesday

likefunny

Anyone watching any of the virtual races being hosted today?

likefunny

Would any Bainies be willing to provide a referral for my application to Bain Advantage? Bain & Company

Anyone on bench reporting to airoli office?

like

𝐍𝐞𝐯𝐞𝐫 𝐦𝐢𝐬𝐬 𝐚 𝐒𝐮𝐜𝐜𝐞𝐬𝐬𝐅𝐚𝐜𝐭𝐨𝐫𝐬 𝐁𝐥𝐨𝐠!

𝐖𝐞'𝐫𝐞 700 🎊🎉👏

Bot-Based SuccessFactors Blogs Telegram Channel!

You too can join us, scan the code to be part of out bot.

#SuccessFactors #SAP #Blogs #HXM 
#Telegram

Post Photo

Anyone riding BA puts?

Any idea how much increment we get with progression from rank staff 2 to 3 ? With progressive raiting 😅

like

Promotion from Staff 3 to Senior 1.
Lead Category - Differentiating.
QMRTE - Met Expectation.
YOE - 5.5 yrs. CTC - 6.50.
Hike and bonus ? Business Consulting

AA travelers: anyone have an idea of what the recognition vouchers are worth to AA employees? Any experience giving to an employee - were they appreciative? Have 20 or so valid until 19. Contd

like

Got off cycle pe offer but they want me to start in feb. I can get my bonus and leave my firm in better terms if I can push it out a few months. Any advice on framing or do I just suck it up and go?

like

Can someone please help with the global employee grade structure, corresponding experience and salary slabs for each?

like

Are career home pages on WITCH useful in getting a job offer?

like
like

Buy a Snoo. Just do it.

like

But what do you -actually- get paid to do?

like

Received an offer for 105K Base and 5K signing bonus TC 110K. This would be a 50% increase. Total YOE: 1.5, I'm located in a HCOL city. Should I hold out for a better offer or take it? This is another consulting gig.

like

Additional Posts in Stocks

Monday- recovery, crash or continued slow drop in stocks?

like

What are good healthcare stocks to invest in?

like

Looking to start investing in South African stocks. Looked at MTN and Standard Bank. Any thoughts!?

like

When I’m online at 10:30 on Sunday night, that doesn’t mean I’m working and you can ping me about some BS that can wait 12 hours until we’re on the clock.

It means I’m watching the Asia open and updating my watchlist for my personal trading account.

Pls fix.

likefunny

I want to invest in solid ETFs after getting burned on straight equities. What do you all recommend?

like

Moving to the U.S. soon, so bear with me on this.
Is there a specific type of account you buy stocks on in the US?
For context, I'm Canadian, I have a TFSA and RRSP (also relatively new to stocks/general personal finance)

like

What do y'all think about HMHC? With California leaning toward virtual learning. Their new Teachers Corner platform could provide a solution.

like

Should I get ibonds?

like

Which is a really good stock signal/alert service that you would recommend? Something that provides buy/sell price signals with very good accuracy.

like

Thoughts on newly IPOd ROOT?

like

Long term picks to get invested in Meta?

like

GDRX dump or hold

like

I guess BIRD might not be the best. If you had about $1000 left over in your brokerage account, and stock suggestions? I know I can throw it back in the solid S&P funds, but open to suggestions!

like

Buy the dip? Or cut the loss? Gotta love this new economy.

like
likefunny

Thoughts on BHVN?

like

Buying 6/18 $160 JNJ calls. Anyone else?

like

Are biopharma and biotech stocks the move for Q4?

like

Thoughts on AYX after big gain yesterday?

like

Which green economy, infrastructure stocks you are still buying or doubing down in 2021.

like