On the back of today's inflation data, expectations for higher interest may have accelerated, countering the US Federal Reserve's lower for longer stance while also flying in the face of lower than expected unemployment figures for last week Friday.
Above is an update on a key chart from our 20-February research report which shows the US 10 year - US 2 Year Spread vs the Nasdaq Composite. The chart reflects the impact of a higher spread on risk assets, specifically the high growth Nasdaq. Note the periods, June 1990, December 2000 and July 2007, where the Nasdaq fell by 31%, 76% and 53% respectively.
Since February, the spread has steepened even further, from 1.23% to 1.52%, while the Nasdaq has gradually weakened.
We think the comparison is key in terms of positioning from among other, a value/growth perspective.
Above is an update on a key chart from our 20-February research report which shows the US 10 year - US 2 Year Spread vs the Nasdaq Composite. The chart reflects the impact of a higher spread on risk assets, specifically the high growth Nasdaq. Note the periods, June 1990, December 2000 and July 2007, where the Nasdaq fell by 31%, 76% and 53% respectively.
Since February, the spread has steepened even further, from 1.23% to 1.52%, while the Nasdaq has gradually weakened.
We think the comparison is key in terms of positioning from among other, a value/growth perspective.