The most significant event of the quiet Monday was the report from the Nikkei that the Bank of Japan will tolerate a further rise in yields on Japanese government bonds above the 1% mark – and that has consequences as well (if the report is correct). Wall Street! Because the Bank of Japan is the “last gas station” for free, interest-free money – and if yields on Japanese government bonds continue to rise, they will become more attractive compared to US government bonds. This in turn means lower demand for US government bonds, and as a result US yields will continue to rise – bad news for Wall Street. US markets initially witnessed a strong recovery, then weakened significantly again. The important thing now is the yen, if it becomes stronger, the carry trades will have to be cancelled.
Notes from the video:
1. S&P 500: Wilson says year-end rally unlikely
2. Apple: Warning signs are increasing – bad news from China
Third webinar with Andre Stagg and Markus Fogman
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