Rising Bond Yields Raise Concerns for Stock Market
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: Fool
- Surging Bond Yields: The 30-year Treasury yield reached a 19-year high this week, while the 10-year yield climbed from 4.03% on March 3 to 4.69% last week, increasing borrowing costs for consumers and negatively impacting company revenues.
- Increased Market Risk: Higher yields make bonds more attractive compared to riskier stocks, potentially putting pressure on share prices, especially as rapid yield increases historically correlate with negative short-term S&P 500 returns.
- Inflationary Pressures: April's inflation rate rose to 3.8%, the highest since May 2023, raising concerns among investors about the Federal Reserve's response, with many believing it should consider raising its target rate to combat rising inflation.
- Key Data Ahead: The upcoming Personal Consumption Expenditures Price Index (PCE) will be a critical indicator; if it surprises to the upside, it could trigger a stock market sell-off as investors seek refuge from inflation and the likelihood of a Fed rate hike increases.
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Analyst Views on GS
Wall Street analysts forecast GS stock price to fall
12 Analyst Rating
5 Buy
7 Hold
0 Sell
Moderate Buy
Current: 1008.370
Low
604.00
Averages
951.45
High
1100
Current: 1008.370
Low
604.00
Averages
951.45
High
1100
About GS
The Goldman Sachs Group, Inc. is a global financial institution that delivers a range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Its segments include Global Banking & Markets, Asset & Wealth Management and Platform Solutions. The Global Banking & Markets segment offers a range of services, including financing, advisory services, risk distribution, and hedging for its institutional and corporate clients. It facilitates client transactions and makes markets in fixed income, equity, currency and commodity products. The Asset & Wealth Management segment manages assets and offers investment products across all asset classes to a diverse set of clients. It also provides investing and wealth advisory solutions. The Platform Solutions segment includes consumer platforms, such as partnerships offering credit cards and point-of-sale financing, and transaction banking and other platform businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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