{"id":11273,"date":"2021-02-12T15:40:30","date_gmt":"2021-02-12T21:40:30","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=11273"},"modified":"2021-02-15T08:23:28","modified_gmt":"2021-02-15T14:23:28","slug":"weekly-earnings-update-the-10-year-treasury-yield-closes-at-1-20-this-week","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=11273","title":{"rendered":"Weekly Earnings Update: The 10-Year Treasury Yield Closes at 1.20% This Week"},"content":{"rendered":"<p>The headline to tonight&#8217;s post isn&#8217;t really an &#8220;earnings-related&#8221; topic, but the 10-year Treasury yield bottomed right around the Jackson Hole Fed conference in early August and closed at a near-term high tonight at 1.20%.<\/p>\n<p>The lows in early August for the 10-year Treasury were between 51 and 53 bp&#8217;s last summer.<\/p>\n<p>That is a sizeable move in the Treasury, relatively speaking, from 51 bp&#8217;s to 120 bp&#8217;s.<\/p>\n<p>The 12\/31\/19 10-year Treasury close was 1.91% &#8211; 1.92% and the spike high in March 20, 1.26% &#8211; 1.27%.<\/p>\n<p>Nothing will throw a wet blanket on this market faster than higher interest rates and higher taxes (in my opinion).<\/p>\n<p><em><strong>SP 500 data (courtesy of IBES data by Refinitiv)<\/strong><\/em>:<\/p>\n<ul>\n<li>The forward 4-quarter estimate rose this week to $173.65 from last week&#8217;s $173.12 and December 31st&#8217;s $159.02<\/li>\n<li>The forward PE rose to 22.6x versus last week&#8217;s 22.5x and December 31st&#8217;s 23.6x.<\/li>\n<li>The SP 500 earnings yield was 4.42% this week versus 4.45% last week and 4.23% at 12\/31\/20.<\/li>\n<li>The &#8220;average&#8221; expected EPS growth for calendar 2020 and 2021 is 5% again this week.<\/li>\n<\/ul>\n<p><em><strong>One Chart This Week:\u00a0<\/strong><\/em><\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/02\/q3q42021expgrorates21221.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-11276\" src=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/02\/q3q42021expgrorates21221-300x242.png\" alt=\"\" width=\"300\" height=\"242\" srcset=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/02\/q3q42021expgrorates21221-300x242.png 300w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/02\/q3q42021expgrorates21221-150x121.png 150w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/02\/q3q42021expgrorates21221-768x619.png 768w, https:\/\/fundamentalis.com\/wp-content\/uploads\/2021\/02\/q3q42021expgrorates21221.png 812w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>This chart shows that weekly revisions are still positive for the SP 500 for forward quarters, per the IBES data.<\/p>\n<p>Upward revisions are typically a positive, all else being equal.<\/p>\n<p>Watch the 10-year Treasury yield and what Administration wants to do with tax policy.<\/p>\n<p>It&#8217;s just my opinion but the many comments the last two weeks around the 2008 stimulus and the 2021 expected stimulus are neglecting one thing: while talking about Bernanke and the &#8220;gradualist&#8221; policy he followed following the Great Financial Crisis, no one is bothering to mention that the Obama Administration and Congress raised taxes early in that Administration.<\/p>\n<p>President Obama blamed &#8220;the deficit&#8221; for the tax increase, but 10-yr Treasury yield was telling you then, and today, that the deficit wasn&#8217;t and isn&#8217;t an issue (yet).<\/p>\n<p>A tax increase will have a dampening effect on GDP and corporate activity.<\/p>\n<p>Talk all opinions for just that &#8211; opinions &#8211; and be skeptical about everything.<\/p>\n<p>Walmart&#8217;s earnings report next week typically unofficially ends the Q4 &#8217;20 earnings season.<\/p>\n<p>Thanks for reading.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The headline to tonight&#8217;s post isn&#8217;t really an &#8220;earnings-related&#8221; topic, but the 10-year Treasury yield bottomed right around the Jackson&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[190,91,4],"tags":[],"class_list":["post-11273","post","type-post","status-publish","format-standard","hentry","category-10-year-treasury-yield","category-weekly-earnings-update","category-wmt"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/11273","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11273"}],"version-history":[{"count":5,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/11273\/revisions"}],"predecessor-version":[{"id":11292,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/11273\/revisions\/11292"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11273"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11273"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11273"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}