U.S. stocks closed sharply lower on Monday as rising bond yields weighed on market-leading growth stocks ahead of crucial inflation data.
All three major U.S. stock indexes ended deep in negative territory, with tech and tech-adjacent stocks pulling the Nasdaq down 2.2%.
“There’s been two kinds of sell-offs in the past month or two,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “There’s the rising yields which primarily affects tech and other growth stocks, and then there’s the recession/economic slowdown sell-off that affects energy and various materials’ names. “Today you’re seeing both.”
The benchmark 10-year U.S. Treasury yield hovered near a three-year high ahead of key inflation data expected on Tuesday.
“All eyes on an inflation number that’s probably going to be the highest in 40 years, which could prompt higher and more frequent (interest) rate hikes from the Fed,” Tuz added.
MacDailyNews Take: Batten down the hatches for Tuesday’s inflation lead balloon.
As we wrote back when the so-called “experts” were calling inflation “transitory” (joke, ignorance, or lie, you decide):
‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021
Earlier this year, Interactive Brokers founder Thomas Peterffy said, “Inflation is 7% — 1% or 2% [in interest rate hikes] doesn’t mean anything. If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%.”
Inflation is repudiation. — Calvin Coolidge
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan
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