I Rarely Do This... But a Serious Market Shock Is Now in Play
For the first time in a long time, there is a credible pathway to a much more serious market outcome. That does not mean a crash is being predicted.
In this update, Garry Davis explains why rapidly rising bond yields, shifting global money flows and a highly leveraged financial system have increased the risk - while several vital market confirmations are still missing.
The key issue is not whether the US 10-year Treasury yield reaches one particular number. It is the speed at which financial conditions are changing. In a highly leveraged system, abrupt moves in bonds, currencies and capital flows can create forced selling and feedback loops that are difficult to contain.
At the same time, credit spreads remain relatively calm, volatility is subdued, major US equity indices remain close to record highs and semiconductors are still holding up. The bearish macro case therefore still lacks important confirmation, which is why this remains a risk scenario rather than a prediction.
For ongoing market guidance, portfolio recommendations, education and direct support, learn more about the Insiders Club.
For an individually managed account where you retain visibility and control, learn more about Portfolio Manager.
Any advice in this video is general advice only. Neither your personal objectives, financial situation or needs have been taken into consideration. Accordingly, you should consider how appropriate the advice, if any, is to those objectives, financial situation and needs, before acting on the advice. Garry Davis (AR No:317590) is an authorised representative of Primary Securities Ltd (AFSL No. 224107).
Note to traders* The publishers of this material wish to disclose that they may hold stocks mentioned in their portfolios and that any decision to purchase those stocks should be made only after the purchaser has made their own enquiries as to the validity of any information in this material.
Past performance should not be taken as an indicator of future returns.
It must also be noted that trading in the stock market involves risk of losing money. Investors and traders can take numerous steps to mitigate such risks with a clear plan, clear targets and entry prices, and strong support from an experienced trader.
This approach underpins everything we do and is where we advise every member to start. Members have access to Garry to support them in creating a trading plan that suits their risk profile, timeframe and capital allocation.