What we’re reading (1/9)
“The Stock Market Embraced Higher Yields. Now It Fears Them.” (Wall Street Journal). “The 10-year bond yield came within a whisker of its high from last April on Wednesday morning, and stocks, especially smaller stocks, didn’t like it one bit. It is part of a switcheroo by investors over the past month. They have shifted from thinking that higher Treasury yields are just an unwelcome side effect of the stronger growth promised by President-elect Donald Trump, to worrying that higher borrowing costs might end up being very important. If the concern is right, get ready for a bumpy ride in 2025.”
“30-Year Mortgage Rate Climbs To 6.93%, The Highest Since July” (New York Times). “There was a moment in late September when mortgage rates, after a monthslong decline, appeared poised to drop low enough to bring would-be buyers and sellers off the sidelines. But that window has closed, at least for now. The average rate on the 30-year mortgage, the most popular home loan in the United States, rose to 6.93 percent this week, Freddie Mac reported on Thursday, the highest since early July.”
“The Great Crypto Crash” (The Atlantic). “Crypto will become more widespread. And the conventional financial markets will come to look more like the crypto markets—wilder, less transparent, and more unpredictable, with trillion-dollar consequences extending years into the future.”
“Can January Really Tell The Stock Market’s Future? Let Us Count The Ways.” (MarketWatch). “Consider those years in which the Dow declined during each of the three early-January indicators — the Santa Claus rally period, the first five trading days of January, and the entire month of January. In such years the stock market from February through December rose 73% of the time. That’s barely different from the 75% odds of a rising market when the Dow rose over each of these three early-January periods. This is one reason why the r-squared is so low for the composite indicator that is based on a combination of all three early-January indicators.”
“This Could Be The Beginning Of The End For Fire Insurance In California” (Politico). “The state’s insurance market has been teetering on the edge of insolvency for years thanks to catastrophic wildfires that have driven many insurers to stop writing new policies and drop existing ones. Wednesday’s wind-driven wildfires in a part of Los Angeles packed with multimillion-dollar homes could accelerate its collapse.”
