US10Y Direction Will Influence NAS100
The US10Y started trending up in February. This adversely affected the NAS100 as growth stocks started to feel the pinch of higher discount rates. The 10-Yr reached a high of around 1.75% at the end of March and then began to pull back (red vertical). This supported the NAS100 and growth stocks in general at first, but yields started to drift and the NAS100 followed. However, from 3rd June (blue horizontal), yields started to decline. Again this has supported the NAS100 , which charted an all-time high yesterday. Currently, the is sitting at -0.88, which shows a strong inverse relationship. Tomorrow’s Fed decision is likely to have a large influence on the direction of the 10-Yr and as such growth stocks, through their discount rate adjustment.