Over the past two weeks, we’ve seen deterioration on multiple fronts
Over the past two weeks, we’ve seen deterioration on multiple fronts: Tom Essaye Quoted in Barron’s
Nasdaq Off Lows as Bond Yields Pull Back
Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that markets had a rosy outlook two weeks ago as traders bet on solid growth, stable yields, and hopes of near-term rate cuts.
“Over the past two weeks, we’ve seen deterioration on multiple fronts,” Essaye says. “Yields are now much higher, the Fed is not going to cut nearly as much as expected, and geopolitical risks are now bubbling up again.”
Essaye believes higher yields and worries that the Federal Reserve will turn to fewer rate cuts than expected has been the biggest problem for markets.
“The market was extremely aggressive on valuation, and central to that valuation is the idea of Fed rate cuts and lowered yields,” Essaye says. “Because that has been removed, the valuation for markets must come down. And that’s exactly what’s happening.”
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