Stocks gain as lower bond yields bolster risk mood
BNN Bloomberg
U.S. stocks ticked higher and Treasuries rallied as a growing chorus of money managers said inflation is nearing a peak and rate-hike bets are overdone.
U.S. stocks ticked higher and Treasuries rallied as a growing chorus of money managers said inflation is nearing a peak and rate-hike bets are overdone.
The S&P 500 bounced higher, reversing some earlier losses. The tech-heavy Nasdaq 100 fell as Netflix slumped more than 30 per cent after reporting its first subscriber decline in more than a decade. That also weighed on other streaming and media companies such as Walt Disney Co., Warner Bros. Discovery Inc. and Paramount Global.
Ten-year yields in U.S. Treasuries shed 7 basis points as Bank of America Corp. to Nomura Asset Management saw buying opportunities in bonds. Bank of America said it has turned long on 10-year Treasuries.
“Our forecasts point to inflation peaking this quarter and falling steadily into 2023,” BofA analysts including Ralph Axel wrote in a note. “We believe this will reduce the panic level around inflation and allow rates to decline.”
U.S. 10-year real yields turned positive for the first time since March 2020, signaling a potential return to the pre-pandemic normal. But that was quickly followed by a global drop in bond yields as investors assessed growth challenges from the Ukraine war and the potential for a peak in inflation.
