ANALYST: ‘There Are So Many Dominoes Just Waiting To Topple That We’re No Longer Sure What To Watch’
June 12, 2013
The reverberations emanating from rising U.S. Treasury yields over the past several weeks are shaking financial markets around the world.
Almost every government bond market – across both developed and emerging economies – is experiencing rising yields as U.S. Treasuries get cheaper, yield more, and thus become more attractive to global investors.
At the same time, fears that the Federal Reserve may begin to taper back monetary stimulus – which have been driving the rise in Treasury yields – are now seeping into equity markets as well, and stocks are selling off.
In a note to clients this afternoon, Miller Tabak Chief Economic Strategist Andrew Wilkinson asks, “Which domino are you watching?”
“There are simply too many (ugly) charts we could stick inside [of this note] and so we stopped short of doing so,” says Wilkinson. “It is hard not to feel as though we are watching out for the lead domino to topple – the one that could set off a chain reaction.”