So amid this bearish orgy we would be remiss to not point out that this morning none other than SocGen's resident inhouse permabear, Albert Edwards, writes that he recently predicted that forecasts of US 10y yields rising back to 1½% "would prove too bearish as the equity market, and especially US tech stocks, would implode before we got there. At the time of writing despite the US 10y yield approaching 1½%, tech stocks, although certainly not yet imploding, have begun to look decidedly squishy."
Edwards first makes some observations on the recent sharp move lower in bond prices, which he puts in context by noting that while "it's been a bad start to the year for government bond investors" the recent losses come only "after the stunning gains made at the height of the pandemic that saw 10y yields collapse to an intra-day low of 0.3% in March from 1.6% only a month before! Prices may have fallen 4% over the last 3 months, but that is not unusual over the past 15 years, especially in the context of the huge price rises last year."
Another way of looking at the recent moves is from their previous 12-month peak, where "even the larger 20% price decline seen in the 30y bond is not an infrequent sight."
As he next adds, "the recent rotation out of 'growth' stocks into value stocks" is also not particularly noticeable in a longer-term context. "Maybe equity investors aren't quite as convinced about a brave new reflationary world lying immediately ahead as most commentators seem to be?"