Large investors use the Equity Risk Premium (ERP) to help determine when its time to pivot long again. Kevin Cook gives you access to this mathematical edge and provides a few likely scenarios for when and where the market bottoms.
Wall Street fell on Wednesday as a two-day rally in U.S. stocks was cut short by rising Treasury yields after data showed firm demand in labor market despite rising interest rates. The benchmark S&P 500 index has gained 4% so far this week as yields fell for two straight sessions on softer U.S. economic data, UK's tax turnaround and Australia's smaller-than-expected rate hike.
The yield on the benchmark U.S. 10-year Treasury note climbed on Wednesday after two straight days of declines, as economic data failed to reinforce recent hopes the U.S. Federal Reserve might pivot to a less hawkish policy stance. U.S. economic data over the past two days hinting the labor market and economy were slowing, as well as a surprise move by the Reserve Bank of Australia (RBA) to raise rates by a less-than-expected 25 basis points helped push the yield on the 10-year down nearly 19 basis points as hopes grew the Fed might start to be less aggressive in tightening policy. The yield on 10-year Treasury notes was up 14.8 basis points to 3.765%.