• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Interest Rates Are on The Rise–And That’s Bad News for the Nasdaq
Stock

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

by July 8, 2023
by July 8, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

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

You Might Also Like
  • Semiconductors Making Big Breakout
  • Equities? Fuhgeddaboudit! Alternative Assets are Leading
  • Energy Sector Finally Becoming Bullish?
  • Is Sentiment Too Bullish?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Mortgage demand drops to lowest level in a month as interest rates rise
next post
MEM TV: Sell Your Stock If It Does This

You may also like

Energy is on Fire

April 5, 2024

Top Strategies to Outperform This Market

May 13, 2023

Odd or Resilient? European Banks

March 24, 2023

Entering the 4th Presidential Year

October 6, 2023

Stocks in Focus: 3 Stocks to Watch

March 21, 2025

Bank Fear Selloff Gives Way To Earnings Driven Rally –...

April 29, 2023

S&P 500 Still SUPER Undervalued!

January 24, 2024

While the Bears Growl, Money is Quietly Moving into Stocks

March 27, 2023

The Ord Oracle August 22, 2023

August 23, 2023

Three Behavioral Biases Impacting Your Portfolio Right Now

February 4, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


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

    Recent Posts

    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025
    • NBA star Russell Westbrook launches AI-enabled funeral planning startup

      May 7, 2025
    • Use This Multi-Timeframe MACD Signal for Precision Trades

      May 7, 2025
    • Judge allows lawsuit over Burger King’s Whopper ads to move forward

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,630 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,185 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,064)
    • Investing (538)
    • Stock (2,529)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against...

      May 7, 2025
    • NBA star Russell Westbrook launches AI-enabled funeral planning startup

      May 7, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,064)
    • Investing (538)
    • Stock (2,529)

    Disclaimer: RoundTableThoughts.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 © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    How to Shield Your Stocks During...

    April 23, 2025

    Larry Williams’ 2024 Market Outlook

    December 16, 2023

    HYG Shares Outstanding Showing Excessive Enthusiasm

    December 15, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here