Some Bubbles Are Starting To Pop

seekingalpha04-22

The yield on the 10-Year Treasury has risen to 4.62% from under 3.9% in late February.Rising rates are taking an increasing toll on the market, as the S&P 500 posted its worst weekly performance since...

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Dr Rck
04-22
Dr Rck
TMSC put options doubled! Correction is needed to reflect what's really happening in the economy!

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSome Bubbles Are Starting To Pop\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-22 10:41 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4684965-some-bubbles-are-starting-to-pop><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The yield on the 10-Year Treasury has risen to 4.62% from under 3.9% in late February.Rising rates are taking an increasing toll on the market, as the S&P 500 posted its worst weekly performance since...</p>\n\n<a href=\"https://seekingalpha.com/article/4684965-some-bubbles-are-starting-to-pop\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SSO","symbol_name":"两倍做多标普500ETF","start_time":0,"source_url":"https://seekingalpha.com/article/4684965-some-bubbles-are-starting-to-pop","article_id":"2429950931","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2429950931","pubTimestamp":1713753661,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"The yield on the 10-Year Treasury has risen to 4.62% from under 3.9% in late February.Rising rates are taking an increasing toll on the market, as the S&P 500 posted its worst weekly performance since","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SSO":"两倍做多标普500ETF","SH":"标普500反向ETF","SDS":"两倍做空标普500ETF","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","VOO":"Vanguard标普500ETF","KEY.AU":"KEY PETROLEUM LTD","BAC":"美国银行","ARM":"ARM Holdings Ltd","OEX":"标普100",".SPX":"S&P 500 Index","KEY":"KeyCorp","SPXU":"三倍做空标普500ETF","IVV":"标普500指数ETF","BK4573":"虚拟现实","LU0106831901.USD":"贝莱德世界金融基金A2","OEF":"标普100指数ETF-iShares","NVDA":"英伟达","BK4581":"高盛持仓","XBI":"SPDR S&P Biotech ETF","UPRO":"三倍做多标普500ETF","SPY":"标普500ETF","PFE":"辉瑞","LU0122379950.USD":"贝莱德世界健康科学A2","AMD":"美国超微公司","BK4170":"电脑硬件、储存设备及电脑周边","ARM.AU":"Anax Metals","MIRM":"Mirum Pharmaceuticals, Inc.","SMCI":"超微电脑","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","AMD.AU":"Arrow Minerals Ltd","PFE.AU":"PANTERA MINERALS LTD"},"translate_title":"一些泡沫开始破裂","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SMCI":1,"XBI":1,"PFE.AU":1,"PFE":1,"NVDA":1,"MIRM":1,"KEY.AU":1,"KEY":1,"AMD":1,"AMD.AU":1,"ARM":1,"ARM.AU":1,"BAC":1,"US30Y.BOND":0.9,"US2Y.BOND":0.9,"US12M.BOND":0.9,"US10Y.BOND":0.9,"US3Y.BOND":0.9,"US5Y.BOND":0.9,"SPY":0.9,"VOO":0.9,"US6M.BOND":0.9,"US7Y.BOND":0.9,"US912797FH58.BOND":0.6,"US912796CX52.BOND":0.6,"US912797HE00.BOND":0.6,"UPRO":0.6,"US912797FS14.BOND":0.6,"US912797GB79.BOND":0.6,"US912797HH31.BOND":0.6,"US912797HG57.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"SSO":0.6,"SPXU":0.6,".SPX":0.6,"SH":0.6,"SDS":0.6,"OEX":0.6,"OEF":0.6,"IVV":0.6,"ESmain":0.6},"content_text":"The yield on the 10-Year Treasury has risen to 4.62% from under 3.9% in late February.Rising rates are taking an increasing toll on the market, as the S&P 500 posted its worst weekly performance since March of 2023 this week.Bubbles in the AI sector and high beta parts of the market are deflating, while rising interest rates are impacting the commercial real estate sector.The S&P 500 is more than halfway to 'correction' territory and is likely to fall further in the weeks ahead.MCCAIGSince late February, the yield on the 10-Year Treasury has moved up from just under 3.9% to 4.62% as of Friday's close. Hope for cuts to the Fed Funds rate have continuously been pushed off throughout 2024, and it is now possible that no rate cuts take place during the year. Last week, Goldman Sachs said the yield on the 10-Year Treasury could rise above five percent again.10-Year Treasury Yield (MarketWatch)Equities managed to navigate the major headwind caused by rising interest rates in March and put the finishing touches on an excellent first quarter, where the S&P 500 rose 10.2%. The index's best quarterly performance since 2019. However, it has been an entirely different environment for stocks so far, here early in the second quarter. The S&P 500 fell just over three percent last week and closed Friday at just over the 5,000 level. It also was the worst weekly performance for the index since March of last year.As rates stay stubbornly 'higher for longer', some bubbles are starting to deflate. Today, we will take a look at several of these and what it may entail for the overall markets in the weeks and months ahead.AI BubbleEnthusiasm for everything AI has been one of the primary factors behind the huge rally in equities since the overall market's recent lows in late October. However, we may be in the process of seeing this bubble being pricked. That was quite evident in market action on Friday, as the NASDAQ plummeted just over two percent to end the trading week on a sour note. The fall was triggered by action in AI related stocks. Super Micro Computer (SMCI) dropped 23% on the day as the company declined to post preliminary Q1 results, which it has done in recent quarters. Regular quarterly numbers will come out on April 30th.This ignited fears that spending on AI might be slowing down. NVIDIA Corporation (NVDA) declined 10% on the day in sympathy, which was its worst daily performance since the start of the Covid lockdowns and Advanced Micro Devices, Inc. (AMD) was off over five percent. Arm Holdings plc (ARM) dropped nearly 17% on the day as well.Seeking AlphaNVDA is now down just over 20% from its all-time high set on March 25th. Even with the pullback, the shares still trade for approximately 18 times forward projected revenues. With Friday's plunge, SMCI is off 42% from its all-time on March 8th.High Beta Is Being PummeledAI is hardly the only part of the market being pressured by higher interest rates. High beta parts of the market have particularly borne the brunt of the downturn in the market so far in April. The small-cap Russell 2000 is off just over eight percent month to date.Seeking AlphaThe SPDR S&P Biotech ETF (XBI) is also nearly in bear market territory, as it has declined nearly 20% since its highs on February 27th, just before yields on the 10-Year Treasury started to move substantially higher.CRE Credit BubbleA big tick up in interest rates was the last thing the already struggling commercial real estate [CRE] sector needed right now. As I recently noted in this article, the Federal Reserve was not going to ride to rescue for this industry that has over $900 billion of debt maturing in 2024, that will need to be refinanced at much higher rates.March CMBS Delinquency Rate By CRE Asset Class (Trepp)Higher rates are just going to push CRE loan delinquency rates up further. And rising CRE delinquency and default rates will increasingly impact the results of banks. Bank of America (BAC) showed a big increase in charge offs due to CRE within its Q1 results.Bank of America Q1 PresentationFortunately, the profits of the major banks will only be dinged by the continuing deterioration in the CRE sector, given their relatively small exposure to the industry.KeyCorp April Company PresentationRegional banks will bear more of the burden of increasing losses from the CRE sector. KeyCorp (KEY) showed some continued deterioration in its non-performing loan book when it reported Q1 results last week, and this regional bank has lower exposure to CRE loans than its regional bank brethren.KeyCorp April Company PresentationI look for the commercial real estate situation to be a growing problem for banking institutions throughout 2024 and most likely well into 2025.ConclusionThe S&P 500 is now off just over five percent from its all-time highs of March. That is halfway to my recent prediction that the index would see at least a 10% decline. The NASDAQ is off 7.6% from its all-time high set on March 21st. Given insiders are more bearish than they have been in a decade, I don't think investors can expect a quick bounce back in the market.InsiderSentiment.comI still think the market has further to fall, and I have roughly half my portfolio in short-term treasuries, yielding nearly 5.4%. That said, I did pick up additional exposure to equities late last week via some covered call orders on some names that I believe have become oversold, such as Pfizer (PFE) and Mirum Pharmaceuticals (MIRM). Pfizer yields north of 6.5% and its earnings should have troughed in FY2023, while Mirum just got a big buy initiation at Stifel Nicolaus. I will continue to redeploy additional 'dry powder' into the market in this matter if equities continue to fall.VIX (Seeking Alpha)I will get more aggressive if either yields start to fall, we see some stabilization in the sectors that have been hit the hardest by rising rates, and/or there becomes more 'panic' in the market. Investor concerns have been rising based on the upward movement in the S&P VIX Index (VIX) this month. I would like to see this volatility index head up to mid-$20s to confirm some additional anxiety and less complacency from investors, before I commit additional funds into equities at what are likely to be lower entry points.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":0},"commentList":[{"id":297909810745512,"gmtCreate":1713760573715,"gmtModify":1713766375409,"author":{"id":"3576157343730083","authorId":"3576157343730083","name":"Dr Rck","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":6,"crmLevelSwitch":0},"htmlText":"TMSC put options doubled! Correction is needed to reflect what's really happening in the economy!","listText":"TMSC put options doubled! Correction is needed to reflect what's really happening in the economy!","text":"TMSC put options doubled! Correction is needed to reflect what's really happening in the economy!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/297909810745512","repostId":2429950931,"repostType":2,"repost":{"id":"2429950931","pubTimestamp":1713753661,"share":"https://www.laohu8.com/m/news/2429950931?lang=&edition=full","pubTime":"2024-04-22 10:41","market":"us","language":"en","title":"Some Bubbles Are Starting To Pop","url":"https://stock-news.laohu8.com/highlight/detail?id=2429950931","media":"seekingalpha","summary":"The yield on the 10-Year Treasury has risen to 4.62% from under 3.9% in late February.Rising rates are taking an increasing toll on the market, as the S&P 500 posted its worst weekly performance since","content":"<html><head></head><body><ul style=\"\"><li><p>The yield on the 10-Year Treasury has risen to 4.62% from under 3.9% in late February.</p></li><li><p>Rising rates are taking an increasing toll on the market, as the S&amp;P 500 posted its worst weekly performance since March of 2023 this week.</p></li><li><p>Bubbles in the AI sector and high beta parts of the market are deflating, while rising interest rates are impacting the commercial real estate sector.</p></li><li><p>The S&amp;P 500 is more than halfway to &#39;correction&#39; territory and is likely to fall further in the weeks ahead.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/3928b61e1cc17e834f94cca7e2ab9d84\" tg-width=\"750\" tg-height=\"500\"/></p><p>MCCAIG</p><p>Since late February, the yield on the 10-Year Treasury has moved up from just under 3.9% to 4.62% as of Friday&#39;s close. Hope for cuts to the Fed Funds rate have continuously been pushed off throughout 2024, and it is now possible that no rate cuts take place during the year. Last week, Goldman Sachs said the yield on the 10-Year Treasury could rise above five percent again.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/ea5dae402ada6f0ca81f6f5a7faca9fe\" tg-width=\"631\" tg-height=\"205\"/></p><p>10-Year Treasury Yield (MarketWatch)</p><p>Equities managed to navigate the major headwind caused by rising interest rates in March and put the finishing touches on an excellent first quarter, where the S&amp;P 500 rose 10.2%. The index&#39;s best quarterly performance since 2019. However, it has been an entirely different environment for stocks so far, here early in the second quarter. The S&amp;P 500 fell just over three percent last week and closed Friday at just over the 5,000 level. It also was the worst weekly performance for the index since March of last year.</p><p>As rates stay stubbornly &#39;<em>higher for longer</em>&#39;, some bubbles are starting to deflate. Today, we will take a look at several of these and what it may entail for the overall markets in the weeks and months ahead.</p><h2 id=\"id_2395673715\">AI Bubble</h2><p>Enthusiasm for everything AI has been one of the primary factors behind the huge rally in equities since the overall market&#39;s recent lows in late October. However, we may be in the process of seeing this bubble being pricked. That was quite evident in market action on Friday, as the NASDAQ plummeted just over two percent to end the trading week on a sour note. The fall was triggered by action in AI related stocks. <strong>Super Micro Computer (SMCI)</strong> dropped 23% on the day as the company declined to post preliminary Q1 results, which it has done in recent quarters. Regular quarterly numbers will come out on April 30th.</p><p>This ignited fears that spending on AI might be slowing down. <strong>NVIDIA Corporation (NVDA)</strong> declined 10% on the day in sympathy, which was its worst daily performance since the start of the Covid lockdowns and <strong>Advanced Micro Devices, Inc. (AMD)</strong> was off over five percent. <strong>Arm Holdings plc (ARM)</strong> dropped nearly 17% on the day as well.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/412e0d3420a1572a1ec7162d3430c837\" tg-width=\"640\" tg-height=\"333\"/></p><p>Seeking Alpha</p><p>NVDA is now down just over 20% from its all-time high set on March 25th. Even with the pullback, the shares still trade for approximately 18 times forward projected revenues. With Friday&#39;s plunge, SMCI is off 42% from its all-time on March 8th.</p><h2 id=\"id_3311925831\">High Beta Is Being Pummeled</h2><p>AI is hardly the only part of the market being pressured by higher interest rates. High beta parts of the market have particularly borne the brunt of the downturn in the market so far in April. The small-cap Russell 2000 is off just over eight percent month to date.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7419310c08a64d17bd575a9bde0e0ad7\" tg-width=\"640\" tg-height=\"333\"/></p><p>Seeking Alpha</p><p>The <strong>SPDR S&amp;P Biotech ETF (XBI)</strong> is also nearly in bear market territory, as it has declined nearly 20% since its highs on February 27th, just before yields on the 10-Year Treasury started to move substantially higher.</p><h2 id=\"id_2839493060\">CRE Credit Bubble</h2><p>A big tick up in interest rates was the last thing the already struggling commercial real estate [CRE] sector needed right now. As I recently noted in this article, the Federal Reserve was not going to ride to rescue for this industry that has over $900 billion of debt maturing in 2024, that will need to be refinanced at much higher rates.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/d9ef948d6cfb4f308680691ad682b74a\" tg-width=\"370\" tg-height=\"179\"/></p><p>March CMBS Delinquency Rate By CRE Asset Class (Trepp)</p><p>Higher rates are just going to push CRE loan delinquency rates up further. And rising CRE delinquency and default rates will increasingly impact the results of banks. <strong>Bank of America (BAC)</strong> showed a big increase in charge offs due to CRE within its Q1 results.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6c41b04e2c6ea190dbc7e986600c7e6b\" tg-width=\"429\" tg-height=\"364\"/></p><p>Bank of America Q1 Presentation</p><p>Fortunately, the profits of the major banks will only be dinged by the continuing deterioration in the CRE sector, given their relatively small exposure to the industry.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a8e3dcfb6bed92e09e4011aa25c2af45\" tg-width=\"640\" tg-height=\"127\"/></p><p>KeyCorp April Company Presentation</p><p>Regional banks will bear more of the burden of increasing losses from the CRE sector. <strong>KeyCorp (KEY)</strong> showed some continued deterioration in its non-performing loan book when it reported Q1 results last week, and this regional bank has lower exposure to CRE loans than its regional bank brethren.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/146718ec6175667a0d90a959409eaece\" tg-width=\"640\" tg-height=\"298\"/></p><p>KeyCorp April Company Presentation</p><p>I look for the commercial real estate situation to be a growing problem for banking institutions throughout 2024 and most likely well into 2025.</p><h2 id=\"id_585762973\">Conclusion</h2><p>The S&amp;P 500 is now off just over five percent from its all-time highs of March. That is halfway to my recent prediction that the index would see at least a 10% decline. The NASDAQ is off 7.6% from its all-time high set on March 21st. Given insiders are more bearish than they have been in a decade, I don&#39;t think investors can expect a quick bounce back in the market.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/9356edefe0ed65a05bc71e23f99a1a74\" tg-width=\"1200\" tg-height=\"988\"/></p><p>InsiderSentiment.com</p><p>I still think the market has further to fall, and I have roughly half my portfolio in short-term treasuries, yielding nearly 5.4%. That said, I did pick up additional exposure to equities late last week via some covered call orders on some names that I believe have become oversold, such as <strong>Pfizer (PFE)</strong> and <strong>Mirum Pharmaceuticals (MIRM)</strong>. Pfizer yields north of 6.5% and its earnings should have troughed in FY2023, while Mirum just got a big buy initiation at Stifel Nicolaus. I will continue to redeploy additional &#39;<em>dry powder</em>&#39; into the market in this matter if equities continue to fall.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6d60a11dc0a73b2f0a06eda9067ae923\" tg-width=\"640\" tg-height=\"226\"/></p><p>VIX (Seeking Alpha)</p><p>I will get more aggressive if either yields start to fall, we see some stabilization in the sectors that have been hit the hardest by rising rates, and/or there becomes more &#39;<em>panic</em>&#39; in the market. Investor concerns have been rising based on the upward movement in the <strong>S&amp;P VIX Index (VIX)</strong> this month<strong>.</strong> I would like to see this volatility index head up to mid-$20s to confirm some additional anxiety and less complacency from investors, before I commit additional funds into equities at what are likely to be lower entry points.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Some Bubbles Are Starting To Pop</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSome Bubbles Are Starting To Pop\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-22 10:41 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4684965-some-bubbles-are-starting-to-pop><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The yield on the 10-Year Treasury has risen to 4.62% from under 3.9% in late February.Rising rates are taking an increasing toll on the market, as the S&P 500 posted its worst weekly performance since...</p>\n\n<a href=\"https://seekingalpha.com/article/4684965-some-bubbles-are-starting-to-pop\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SSO":"两倍做多标普500ETF","SH":"标普500反向ETF","SDS":"两倍做空标普500ETF","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","VOO":"Vanguard标普500ETF","KEY.AU":"KEY PETROLEUM LTD","BAC":"美国银行","ARM":"ARM Holdings Ltd","OEX":"标普100",".SPX":"S&P 500 Index","KEY":"KeyCorp","SPXU":"三倍做空标普500ETF","IVV":"标普500指数ETF","BK4573":"虚拟现实","LU0106831901.USD":"贝莱德世界金融基金A2","OEF":"标普100指数ETF-iShares","NVDA":"英伟达","BK4581":"高盛持仓","XBI":"SPDR S&P Biotech ETF","UPRO":"三倍做多标普500ETF","SPY":"标普500ETF","PFE":"辉瑞","LU0122379950.USD":"贝莱德世界健康科学A2","AMD":"美国超微公司","BK4170":"电脑硬件、储存设备及电脑周边","ARM.AU":"Anax Metals","MIRM":"Mirum Pharmaceuticals, Inc.","SMCI":"超微电脑","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","AMD.AU":"Arrow Minerals Ltd","PFE.AU":"PANTERA MINERALS LTD"},"source_url":"https://seekingalpha.com/article/4684965-some-bubbles-are-starting-to-pop","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2429950931","content_text":"The yield on the 10-Year Treasury has risen to 4.62% from under 3.9% in late February.Rising rates are taking an increasing toll on the market, as the S&P 500 posted its worst weekly performance since March of 2023 this week.Bubbles in the AI sector and high beta parts of the market are deflating, while rising interest rates are impacting the commercial real estate sector.The S&P 500 is more than halfway to 'correction' territory and is likely to fall further in the weeks ahead.MCCAIGSince late February, the yield on the 10-Year Treasury has moved up from just under 3.9% to 4.62% as of Friday's close. Hope for cuts to the Fed Funds rate have continuously been pushed off throughout 2024, and it is now possible that no rate cuts take place during the year. Last week, Goldman Sachs said the yield on the 10-Year Treasury could rise above five percent again.10-Year Treasury Yield (MarketWatch)Equities managed to navigate the major headwind caused by rising interest rates in March and put the finishing touches on an excellent first quarter, where the S&P 500 rose 10.2%. The index's best quarterly performance since 2019. However, it has been an entirely different environment for stocks so far, here early in the second quarter. The S&P 500 fell just over three percent last week and closed Friday at just over the 5,000 level. It also was the worst weekly performance for the index since March of last year.As rates stay stubbornly 'higher for longer', some bubbles are starting to deflate. Today, we will take a look at several of these and what it may entail for the overall markets in the weeks and months ahead.AI BubbleEnthusiasm for everything AI has been one of the primary factors behind the huge rally in equities since the overall market's recent lows in late October. However, we may be in the process of seeing this bubble being pricked. That was quite evident in market action on Friday, as the NASDAQ plummeted just over two percent to end the trading week on a sour note. The fall was triggered by action in AI related stocks. Super Micro Computer (SMCI) dropped 23% on the day as the company declined to post preliminary Q1 results, which it has done in recent quarters. Regular quarterly numbers will come out on April 30th.This ignited fears that spending on AI might be slowing down. NVIDIA Corporation (NVDA) declined 10% on the day in sympathy, which was its worst daily performance since the start of the Covid lockdowns and Advanced Micro Devices, Inc. (AMD) was off over five percent. Arm Holdings plc (ARM) dropped nearly 17% on the day as well.Seeking AlphaNVDA is now down just over 20% from its all-time high set on March 25th. Even with the pullback, the shares still trade for approximately 18 times forward projected revenues. With Friday's plunge, SMCI is off 42% from its all-time on March 8th.High Beta Is Being PummeledAI is hardly the only part of the market being pressured by higher interest rates. High beta parts of the market have particularly borne the brunt of the downturn in the market so far in April. The small-cap Russell 2000 is off just over eight percent month to date.Seeking AlphaThe SPDR S&P Biotech ETF (XBI) is also nearly in bear market territory, as it has declined nearly 20% since its highs on February 27th, just before yields on the 10-Year Treasury started to move substantially higher.CRE Credit BubbleA big tick up in interest rates was the last thing the already struggling commercial real estate [CRE] sector needed right now. As I recently noted in this article, the Federal Reserve was not going to ride to rescue for this industry that has over $900 billion of debt maturing in 2024, that will need to be refinanced at much higher rates.March CMBS Delinquency Rate By CRE Asset Class (Trepp)Higher rates are just going to push CRE loan delinquency rates up further. And rising CRE delinquency and default rates will increasingly impact the results of banks. Bank of America (BAC) showed a big increase in charge offs due to CRE within its Q1 results.Bank of America Q1 PresentationFortunately, the profits of the major banks will only be dinged by the continuing deterioration in the CRE sector, given their relatively small exposure to the industry.KeyCorp April Company PresentationRegional banks will bear more of the burden of increasing losses from the CRE sector. KeyCorp (KEY) showed some continued deterioration in its non-performing loan book when it reported Q1 results last week, and this regional bank has lower exposure to CRE loans than its regional bank brethren.KeyCorp April Company PresentationI look for the commercial real estate situation to be a growing problem for banking institutions throughout 2024 and most likely well into 2025.ConclusionThe S&P 500 is now off just over five percent from its all-time highs of March. That is halfway to my recent prediction that the index would see at least a 10% decline. The NASDAQ is off 7.6% from its all-time high set on March 21st. Given insiders are more bearish than they have been in a decade, I don't think investors can expect a quick bounce back in the market.InsiderSentiment.comI still think the market has further to fall, and I have roughly half my portfolio in short-term treasuries, yielding nearly 5.4%. That said, I did pick up additional exposure to equities late last week via some covered call orders on some names that I believe have become oversold, such as Pfizer (PFE) and Mirum Pharmaceuticals (MIRM). Pfizer yields north of 6.5% and its earnings should have troughed in FY2023, while Mirum just got a big buy initiation at Stifel Nicolaus. I will continue to redeploy additional 'dry powder' into the market in this matter if equities continue to fall.VIX (Seeking Alpha)I will get more aggressive if either yields start to fall, we see some stabilization in the sectors that have been hit the hardest by rising rates, and/or there becomes more 'panic' in the market. Investor concerns have been rising based on the upward movement in the S&P VIX Index (VIX) this month. I would like to see this volatility index head up to mid-$20s to confirm some additional anxiety and less complacency from investors, before I commit additional funds into equities at what are likely to be lower entry points.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":14,"commentSize":0,"repostSize":2,"favoriteSize":3,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2429950931"}