10-year yields rise above pre-SVB collapse, highest since 2009. Higher nominal yields impact corporate bonds, increasing refinancing costs. Will we see another blow-up in the next few weeks?

Real yields on 10-year Treasuries closed yesterday at the highest since 2009. pic.twitter.com/Ujfb0Lco7l

— Lisa Abramowicz (@lisaabramowicz1) August 15, 2023

Nominal yields keep going higher and this affects corporate bonds $LQD, therefore cost of refinancing is increasing. We can expect this chop into the market to keep going while investors move from growth to value stocks to find yield. I’ll update some stonks later. pic.twitter.com/XapWddB00j

— 🅰🅻🅴🆂🆂🅸🅾 (@AlessioUrban) August 15, 2023

"We have it all" pic.twitter.com/qA9fBt8cD5

— Mac10 (@SuburbanDrone) August 15, 2023

10-year yields are now convincingly above where they were prior to the collapse of SVB – will we see another blow-up in the next few weeks?👇 pic.twitter.com/BsVyLxcDJo

— Longview Economics (@Lvieweconomics) August 15, 2023

Fitch warns it may be forced to downgrade dozens of banks, including JPMorgan Chase https://t.co/Zo9xS0FziO

— CNBC (@CNBC) August 15, 2023

I keep hearing how everyone's too bearish. 🤷‍♂️

The August edition of BofA's Global Fund Manager Survey found respondents least bearish since February 2022 (Bloomberg, Reuters). Noted investors least underweight to equities since April 2022 with cash allocations at a 21-month low.

— Markets & Mayhem 🤖 (@Mayhem4Markets) August 15, 2023

Here is the playbook..

Data will remain solid for 2023 (due to lagged credit effects from China)

And then as everyone turns upbeat, 2024 will probe to be the actual true downturn?

More -> https://t.co/o5O3163QmN pic.twitter.com/C6CB6HGyBT

— AndreasStenoLarsen (@AndreasSteno) August 14, 2023

Banking Giants, Including JPMorgan Chase, On Fitch’s Downgrade Radar

Fitch Ratings warns that the U.S. banking industry is nearing the risk of major rating downgrades, potentially affecting top banks like JPMorgan Chase. A further downgrade of the industry’s score could force Fitch to reassess the ratings of over 70 U.S. banks. This action could decrease the ratings of the country’s leading banks, possibly driving some weaker institutions toward non-investment-grade status. This move follows recent actions by credit rating firms that have disturbed the markets. The potential consequences of widespread downgrades could squeeze banks’ profit margins and impact their ability to access debt markets.

Office Distress Mounting in Houston (CRE is cratering nationwide)

Michael Burry of ‘The Big Short’ Fame Bets Against the Market With 1.6Billion in S&P & Nasdaq Puts

Michael Burry, known for anticipating the 2008 crisis, has been rapidly adjusting his portfolio. Three months ago, he offloaded several 2022 holdings and invested in Chinese stocks, energy firms, and distressed banks. However, recent filings reveal he’s sold many of these assets, including stakes in JD.com and Alibaba. He’s now invested in companies like Expedia and Charter Communications. Significantly, Burry has acquired puts on both the S&P 500 and Nasdaq 100, suggesting he’s hedging against a market downturn.

Mortgage Rates Soaring towards 23-Year Highs Due to Bond Market

US Treasury yields and mortgage rates rose recently, despite a tame CPI report. On August 11, 2023, mortgage rates surged to 7.19%, nearing the high of 7.37% from October 2022, the highest in nearly 23 years. The chart patterns suggest potential for further hikes. Current yield inversions are among the steepest in history. Despite the CPI dropping to 3.2% year-over-year, signs indicate another inflation uptick and continued Fed hikes. The housing market is expected to suffer, especially with consistent shelter price increases. The recent rise in Producer Price Index and spikes in crude petroleum further fuel inflation concerns.