Market Forecast for the Near Future.
I think stock market shows signs of resiliency. I believe stock market will see a good interest from retail clients in the near future, because this is the only game in town. Bonds became very dangerous investment because of expected changes in Federal Reserve monetary policies. As long as we will not have very strong economic data coming out in the near future that would push interests rates over the top, the stock market will not sell off.
Treasury prices went down after a series of strong job reports and it put the Federal Reserve’s monetary policy in the center of attention. The risk in the market right now is the yield on 10-year Treasury bond and it if will rise over 3% the stock market could face major profit taking. If interests rates go up, housing industry will suffer tremendously because of the higher mortgage rates and housing will become more expensive. Also, political tensions in Egypt, Turkey, Brazil, and Greece also enforced sell off in bonds. What do you think?
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