What we’re reading (9/19)
“10-Year Treasury Yield Jumps To 3.51%, The Highest Level Since 2011” (CNBC). “The benchmark 10-year Treasury yield gained 6 basis points to 3.518%, hitting its highest level since April 2011, and was last up 4 basis points to 3.49%. The yield on the 2-year Treasury bond rose 9 basis points to trade at 3.949%, trading around levels not seen since 2007.”
“Rising Bond Yields Change The Calculus For Stocks” (Wall Street Journal). “After several Fed interest-rate increases, yields across the Treasurys market are trading at multiyear highs. Now, fewer than 16% of S&P 500 stocks have dividend yields greater than the yield of the two-year U.S. Treasury note, which is approaching 4%. Fewer than 20% have dividend yields greater than the yield of the 10-year note, according to Strategas. Those numbers mark the lowest share since 2006.”
“Warnings Signs Multiply Ahead Of Pivotal Fed Meeting” (DealBook). “All eyes will be on the Fed this Wednesday. The consensus estimate is for a 75-basis-point increase, bringing the benchmark interest rate to between 3 and 3.25 percent — up from near zero at the start of the year. Higher interest rates generally slow lending and economic activity, and with it the forces that push prices higher. So far, it’s not going to plan. Last week, the government reported that consumer prices rose 8.3 percent in the past year, through the end of August.”
“Need Your Money Now? The Markets Aren’t Helping.” (New York Times). “The stock market has been painful if you have been looking at it closely. So don’t look. Set up your investments, then take a deep breath. After that, what should you do? In a word: nothing. Get on with your life.”
“The Rational Case For Monarchy” (Wrong Side of History). “The upside risk on republicanism is pretty small, since among developed liberal democracies both forms of government can be found. The downside risk, however, is gigantic. If you were to opt for a monarchy, you’d be unlucky to land in Saudi Arabia, for its repression, or Swaziland, for its poverty and ill heath. But there are far worse places to live than Saudi, for the depths of human depravity afforded by the absence of a monarch is essentially endless; just in that neighbourhood you could instead get Syria or Iran or Iraq, Libya or Yemen, and across the world everything from surveillance capitalism to anarcho-clannism to the eccentric last holdouts of Marx’s followers. If you were to go back over the past couple of centuries, the vast majority of the most appalling regimes would be republics.”
