FormerXBC Inc XEBEQ

RE:RE:RE:Basic economics

[ferret_ca]

the main reason bond yields shot up yesterday was because there was a huge shortage of buyers for the govt bond issue, big players reacted quickly adjusting portfolios causing the big drop yesterday, which could continue a bit but to a muchlesser degree.

yes bond rates will eventually creep up but they were also at all time lows and still close to them, Powell emphatically stated in his 2 day affair with congress that interest rates will remain low for the foreseeable future. we most likely have another 2 years of these low rates till everything stablizes after all the stimulus, rates simply cannot go up much at all for a while yet, Same is true for Canada yesterday the sudden blip in bond yields pushing the 10 yr up over 1.6% was very short and it came back down to low 1.40's the market is looking for any reason to correct a bit. a reaction like this causes a chain reaction with stop losses exasperating the sell off and margin calls, so many new day traders etc in the market I suspect (but don't no for sure) that margin buying had been on the upswing over most of the pandemic.  

people panic and sell their winners, tech was due for a big pull back and the ongoing switch into value was long over due, although tech is still the place to be long term but momentum had gotten out of hand on some stocks.

cheers ferret