Money Control Place
  • Politics
  • Business
  • Stocks
  • Investing
  • Politics
  • Business
  • Stocks
  • Investing

Money Control Place

Stocks

Interest Rates Are on The Rise–And That’s Bad News for the Nasdaq

by July 8, 2023
July 8, 2023
Interest Rates Are on The Rise–And That’s Bad News for the Nasdaq

The stock market pulled back last week amid news of mixed economic data, as well as the release of notes from the Federal Reserve’s latest meeting. Thursday’s report from ADP that corporate hiring surged in June was the most impactful report, as it sparked an uptick in already rising interest rates. The Federal Reserve wants employment levels to recede so that consumer spending will be lower and, hence, inflation. FOMC notes, which reiterated a need to continue to hike rates in the face of moderating, yet still high, inflation, also pushed interest rates higher.

Daily Chart of 10-Year US Treasury Yield

Rising yields have caused the stock market to decline in the past, with high growth stocks being the most negatively impacted. This is because the value of future earnings looks less attractive due to their longer-term cash flow horizons. Below is a chart of the Tech-heavy Nasdaq from mid-August 2022 until today and, as shown, the Nasdaq generally pulls back as interest rates rise. More recently, however, the Nasdaq has held in despite a rise in the yield of the 10-year Treasury. The question, at this time, is whether rates will continue to rise and, if so, whether we will see the markets pull back further.

Nasdaq Composite vs. Yield on 10-Year Treasury

Next week will undoubtedly provide more clues regarding sentiment around higher interest rates as traders get back to their desks and digest events from this week. Also of note will be the release of Core CPI and PCI data for June. These indicators are readily-watched measures of inflation, as they reveal if prices for consumers or wholesale goods are on the rise.

At this time, both the S&P 500 and the Nasdaq remain in confirmed uptrends, as they’re above key moving averages, with their momentum indicators in positive territory. In addition, cyclical areas of the market, such as the Industrial and Consumer Discretionary sectors, remain in strong uptrends as fears of a recession continue to recede.

For those who’d like to be alerted to any negative shift in high-growth stocks, as well as have access to top cyclical stocks poised to trade higher, use this link here to trial my twice-weekly MEM Edge Report. You’ll also be kept up to date on the rotation into bank stocks as they begin to report earnings next week and much more.

Warm Regards,

Mary Ellen McGonagle, MEM Investment Research

0
FacebookTwitterGoogle +Pinterest
previous post
Three Key Charts Showing Bearish Divergences
next post
7 New Tools to Help You Chart Highs, Lows, and Other Crucial Price Levels

Related Posts

Is the Market Ready for Another Dip?

January 13, 2024

Gold Starting New 13.5-Month Cycle

September 1, 2023

Magnificent 7 Not All Magnificent!

March 1, 2024

Week Ahead: NIFTY Travels A Weak Rally; Stay...

June 17, 2023

A Wild Ride in the Market

June 16, 2023

Expect A Very Strong Earnings Report From This...

July 6, 2023

Investors Await CPI and Bank Earnings: Will They...

January 16, 2025

Three Defensive Plays for Post-Tariff Survival

April 4, 2025

Market’s At RISK in The Mega Cap Bloodbath!

October 26, 2023

Earnings for 2023 Q2, Still Trending Up

October 5, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • Run Your Stock Portfolio Like a Pro Sports Team

    • Leadership Rotation Could Confirm Corrective Phase

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

    • 1911 Gold Temporarily Suspends Operations at True North Complex due to Bissett Evacuation Order

    • Ontario Backs Down on Key Bill 5 Provisions, Echoes BC’s Mining Debate

    • Appeals Court Grants Trump Temporary Reprieve on Tariffs, “TACO” Taunts Gain Steam

    Categories

    • Business (1,223)
    • Investing (2,503)
    • Politics (3,699)
    • Stocks (1,614)
    • Uncategorized (20)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: MoneyControlPlace.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 moneycontrolplace.com | All Rights Reserved