Market Ethos - February 9th, 2018

The Bell Has Been Rung

 

Last week we wrote a piece titled “Hey Equity Markets, Bond Yields Toll for Thee.” Well, bond yields tolled alright, and equity markets found their bell rung in terms of handling rising bond yields. The U.S. ten-year topped out twice last week at precisely 2.88%. The S&P 500 declined 5.2% and the SP/TSX Composite fell 5.4% respectively with both indices falling into correction territory (10%+) from their highs in January. Welcome to the first correction in 722 days, one of the longer streaks ever without a significant pullback. After Friday’s late day bounce equity markets closed the week just under -10% from their respective peaks quickly wiping out months of gains.