Equities are on the edge…

While stocks have undoubtedly lost momentum, few bulls notice the rise in bond yields which if they continue will crash equity markets. This is systemically extremely dangerous.

There is a growing air of surrealism in markets. The S&P500 is close to all-time highs, yet yields on US treasuries are rising, with the 10-year note yield having risen from 3.62% on 16 September to 4.234% today and the long bond to 4.52%. And this is despite expectations of lower interest rates over the next few months.