The SP500 earnings yield is approximately 6.4% on projected 2007 earnings. I'd imagine we'll see a large haircut on the SPX if the ten-year yield rallies 100-basis! I'm not stating it won't happen, but IMO it's much more likely the SPX will fall to reach parity.
It's obvious he's either too lazy or too stupid to learn. He wants people to tell him what is going to happen. .. and it better be bullish or else. Remember this is guy who after a few days of selling after the the longest bull market in 100 years states, "this selling is way overdone". Yet when the market was up 24 out of 27 days it never crossed his mind that the buying could have been way overdone. Anyways I share your sentient. I hope he gets wiped or humble or just shuts the f up. I doubt he will though.
this is funny,out of all the replies there are only 2 that answered his question..why do all these other guys post on this board? the negativity is a friggin joke. he asked a question,if you refuse to answer it why respond? it seems the market rallied when yields started falling and the market really took off when the fed minutes were released today. i'm a trader so i can't tell you whee the markets will go tomorrow.
Key part of this is "projected 2007 earnings". Everything is priced to perfection already, you will see guidance get lowered by many, just like the big step back by Newcor Steel. With rates going up, consumer spending will be affected AS well as business spending. Housing will take a harder fall with higher rates as well, leading to more unemployment. Bottom line is if the top is not in already (my vote), it is very near. And since I just can't resist........ I got your respect right here stock_buyandholdandneverselland watchgoallthewayagainstmewhydidn'tijusttakeprofit-
I was just replying to many of his posts. It really had nothing to do with the question and maybe should have been reserved for another thread or PM. Anyway what's done is done. stock_trad3r - If you really want to trade for a living, continue your search of knowledge, things will begin to click after a few years. Ohh and try to be humble, trust me if you're not the market will humble you itself.
I assume nonlinear believes the index markets will rise, which lowers yield. Parity with current 10-year rates would require a > 300 point rally on SPX. This assumes static $earnings [and $TYX] based upon year-end 2007 projections.
The bond selloff isn't severe, certainly it isn't a correction, a crash nor much less, a recession. The real "problem" is the summer slowdown. It's probable that the market will move sideways this summer, then during fall the market will resume its moderately bullish trend.