Prepare for turbulence if yields keep rising

Martin Conlon


The rally in interest-rate-sensitive stocks could never last. The bubble would always expire when central banks refrained from more meddling and we may have reached this point. Bond yields are rising as policymakers, acknowledging that monetary policy has reached its limits, are turning to fiscal policy to prod economies. Amid a rise in global bond yields, a 50-basis-point jump in Australian 10-year government bond yields pummelled Sydney Airport by 14% and lopped 9.3% off Transurban over the past two months. During that time, REITs were slammed 12% and utilities 6.2%. The S&P/ASX 200 Accumulation shed only 1.7% over September and October. The worry for yield plays is that the rise in global bond yields looks entrenched. Be prepared for turbulence if yields rise faster and by more than expected. (VIEW LINK)

5 stocks mentioned

Martin Conlon
Head of Australian Equities

Martin is the Head of Australian Equities, and leads the portfolio construction process for Australian Equity portfolios, while also retaining analytical responsibilities for a variety of sectors including Diversified Financials, Gaming,...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.


Sign In or Join Free to comment