The yield on 10-year US Treasury bonds breaks the 4% mark for the first time since 2010
CNBC Pro: Credit Suisse says now is the time to buy two green hydrogen stocks — giving one over 200% upside
Credit Suisse says it’s time to jump into the green hydrogen sector, with a suite of catalysts set to propel the clean energy powerhouse.
“Green hydrogen is a growth market – we are increasing our market estimates for 2030 [over] 4x,” the bank said, predicting that green hydrogen production will increase 40x by 2030.
It names two stocks to ride the boom — one with more than 200% upside potential.
— Wheat Tan
Chinese yuan weakest since 2008, dollar index strengthens
China’s offshore and onshore yuan broke 7.2 against the dollar, hovering at its weakest levels since early 2008.
The US Dollar Index was also up 0.33% to trade at 114.47.
Japanese consumer inflation may decline in 2023: BOJ meeting minutes
Consumer inflation excluding fresh food is likely to rise this year, but the rate of increase will slow thereafter in energy prices, minutes after the Bank of Japan’s July 2018 release meeting said.
Some members also said that inflation excluding fresh food and energy is unlikely to reach 2% over the projection horizon. That CPI was 1.6% in August.
“These members expressed the view that the CPI inflation rate is expected to decline from fiscal year 2023 onwards, unless commodity prices continue to rise,” the minutes read.
On the yen, a BOJ board member said that downward pressures on the currency could be alleviated if a slowdown in the global economy led to a global fall in inflation and interest rates.
Another member said the yen could even rise if the global economy faces shocks.
– Abigail Ng
CNBC Pro: Money Manager reveals what’s next for stocks — and shares how he’s trading the market
Neil Veitch, investment director at Edinburgh-based SVM Asset Management, expects the macro landscape to remain “rather difficult” for the remainder of the year.
Speak with CNBC Pro Talks Last week, Veitch identified the key drivers that could help the stock market become “more constructive” and shared his view of growth versus value.
– Zavier Ong
Earnings questions, potential recession means more selling could be ahead
The Dow and S&P 500 are down for six straight days, with many seeing broad selling typical of so-called “washout” days.
That can sometimes be a contrarian buy signal on Wall Street, but many investment professionals are skeptical that the sell-off is over. One reason is that earnings expectations for next year still show solid growth, which would be unlikely in the event of a recession.
“We know that when we see a reversal in 2-year yields…and when we see a reversal in the dollar, that gives us an opportunity to bounce back from these extremely oversold conditions,” said Andrew Smith, Chief Investment Strategist at Delos Capital Advisors in Dallas. “But I’m having a hard time coming to terms with the fact that the results story will be as good as we expect.”
Additionally, the dramatic moves in bond and currency markets mean that “something broke,” and it might be wise to wait for that information to emerge, Smith said.
On the positive side, Smith cited a strong job market and signs of continued travel spending as a sign the US economy may be able to avoid a wider recession.
— Jesse Pound
10-year US yield closes at key 4% level
That 10-year Treasury yield nears 4%, a level not seen since 2010.
That United States 10 years is the benchmark yield that sets the tone for home mortgage rates and other consumer and business lending. It is higher this week as UK gilt yields rise and expectations of an aggressive Federal Reserve Board rise.
The yield was 3.96% in afternoon trade. The 10-year yield reversed an earlier decline and gained about basis points. (One basis point equals 0.01 percentage points)
“It was definitely impressive and I just don’t think anyone is ready to step in and catch the falling knife just yet,” said BMO’s Ben Jeffery. He added that a lack of liquidity has also boosted yields, which move inversely with prices.
Jeffery said the yield ahead of the 1 p.m. auction of the 5-year notes was also moving higher.
He said that 10-year-olds tested the 4% mark in 2010. “The last time we were sustained above 4% was in 2008. There’s another technical level at 4.10% and then there’s not much notable until 4.25%,” he said.
— Patti Dom