Bond yields fall as recession fears rise

U.S. stocks surged on Friday, starting the third quarter with gains after the first half represented the S&P 500’s worst performance since 1970.

The gains in equities came as bond yields fell slightly, with the 10-year US Treasury yield falling 8 basis points to 2.89%. The 10-year yield hit a low of 2.80% on Friday, after trading at a cycle high of 3.50% in early June.

Bond yields are falling because investors are increasingly cautious about the possibility of slowing economic growth and, ultimately, a


recession

. The first quarter has already seen US GDP growth contract by 1.6%, and the Federal Reserve’s GDPNow forecast suggests that the second quarter will also see a drop of around 1%.

This means that the United States could already be in a recession, because all it takes is two consecutive quarters of negative GDP growth. But for now, bad news like slower economic growth could be good news for the stock market, as slower growth means inflation under control and the likelihood of fewer interest rate hikes from from the Fed.

Here’s where the U.S. indices stood at the 4 p.m. ET close on Friday:

Michael Burry of ‘The Big Short’ believes the current 20% market decline is only halfway there, as the famed investor now expects corporate earnings to decline significantly.

Adjusted for inflation, H1 2022 S&P 500 down 25-26% and Nasdaq down 34-35%, Bitcoin down 64-65%,” Burry tweeted Thursday. “It was the multiple squeeze. Then the profit squeeze. So maybe halfway.”

With the first half of 2022 on the books, take a look at the 10 worst performing stocks in the S&P 500. Most stocks were in the tech or consumer discretionary sectors, with some top names like Netflix and PayPal in the lead. head of list. , among others.

A drop in interest rates trickled down to mortgage rates this week, with the 30-year fixed mortgage falling to 5.7%, according to data from Freddie Mac. The decline helped push lumber prices up more than 7% on Thursday.

Russian President Vladimir Putin has moved to take control of the Sakhalin-2 oil and gas project, threatening to oust major foreign players, including Shell. This move could put continued upward pressure on gasoline prices in the future.

West Texas Intermediate crude oil rose 2.56% to $108.38 a barrel. Brent, the international oil benchmark, jumped 2.39% to $111.64.

Bitcoin prices fell 2.12% to $19,298. Ether prices jumped 0.59% to $1,060.

Gold rose 0.09% to $1,809.10 an ounce. The 10-year Treasury yield fell 8 basis points to 2.89%.