A Thread 🧵on how bond yields impact stock market ?

Must read for beginners in #StockMarket.

(RT to maximize reach.)

#Bonds #BondYields #StockMarket #Investing

What is #bond ?

Bonds are issued by governments and corporations when they want to raise money. By buying a bond, investor is giving the issuer a loan, and issuer agrees to pay the investor back the face value of the loan on a specific date, and to pay periodic interest as well.
What is bond yield ?

Bond yield, on the other hand, is the return that an investor gets on that bond or on a particular government security.

#Investing #StockMarket #Bonds
Relation between #InterestRates, #BondYield and #BondPrice :

A fall/rise in interest rates in an economy pushes up/pulls down bond prices. However, bond yields fall/rise in this situation.
Effect of Bond Yields on Economy & #StockMarket :

Rise in bond yields denotes higher interest rates in economy. This increases borrowing costs for companies & consumers. This ultimately reduces overall demand in economy & negatively impacts #StockMarket.
🌟Conclusion 🌟

Bond Yields ⬇️ Stock Market ⬆️
This is what happened

US 10-year T-note yield surged to a 1-year high of 1.609 percent.

10-year UK gilt yield rose to an 11-month high of 0.829 percent.

10-year German bund yield climbed to an 11-month high of -0.216 percent.

This resulted in global equity sell off.
This resulted in Bloodbath on Dalal Street as #BSE #Sensex fell 1,939 points and #NSE #Nifty settled below 14,550.

More from Genericlearnings

Perhaps you have the idea that calling me " 1 lot Nandy" is somehow derogatory and a easy poke at me. Allow me to explain why I look at this moniker as a badge of honour


I have traded 1 lot continuously twice in my life. The first in 2003 after I blew up on my INFY trade. I traded 1 lot ACC fut consistently and made 50k in a month

The 2nd time in 2013. When I suffered continuous losses for 5-6 months due to a variety of psychological issues. Then I traded 1 lot Nifty options consistently for 3 months. After that 2 lots for next 1 month and slowly increased

I have shared these two incidents on my various interveiws and regularly share this in detail with my handholding students when I talk about trading psychology.

This logic of trading 1 lot to iron out trading issues I learnt from the interview of Anthony Saliba, who traded 1 lot in options for 6 months. BTW, Saliba was the only options trader to have been profiled on the original Market Wizards ( I read his interview and used his logic)

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