Account

New to ADSS? Open an
account now to get started.

OR

Already have an account?

Add funds to your ADSS account

Account

New to ADSS? Open an
account now to get started.

Add funds to your ADSS account

Trends & Analysis
News

Crude oil spikes on US inventories report

News

Does Apple have more room to run?

News

Gold spikes to new highs on Fed remarks

News

GBP/USD price may correct lower

News

Goldman Sachs’ stock surges on upbeat Q2

News

Caution ahead of Netflix’s earnings?

Trends & Analysis
News

Crude oil spikes on US inventories report

News

Does Apple have more room to run?

News

Gold spikes to new highs on Fed remarks

News

GBP/USD price may correct lower

News

Goldman Sachs’ stock surges on upbeat Q2

News

Caution ahead of Netflix’s earnings?

Asset Watch

Has the NASDAQ 100 bottomed?

Thursday, October 12, 2023

Despite ongoing geo-political unrest, global stocks largely shrugged off the geopolitical crisis. Thinking counterintuitively, Fundstrat’s Tom Lee told clients on Oct. 9 that falling interest rates should outweigh any conflict concerns. He wrote:

 

“The rally in bonds (also means falling rates) could break the ‘short the bond market’ fervour that has gripped the rates market for the past month. We believe a substantial decline in interest rates could happen with the 10-yr backing off from the high 4.8%-ish ranges seen lately.”

 

And while rapidly rising rates have been a thorn in stocks’ side, a reversal of the trend could support a Santa Clause rally, and the NASDAQ 100 could be a primary beneficiary.

Technology stocks are sensitive to interest rates because they typically trade at higher multiples than other sectors, and when rates rise, the re-pricings often lead to larger drawdowns, like in 2022.

To that point, the black line tracks the one-hour movement of the NASDAQ 100, while the green line tracks the inverted (down means up) one-hour movement of the U.S. 10-Year Treasury yield. As you can see, the pair have largely gone in opposite directions since July, with higher interest rates (lower green line) pressuring the index. In contrast, a pullback in the 10Y yield (higher green line) could have the opposite effect in the months ahead.

So, are you buying the ‘rates down, stocks up’ thesis or does the NASDAQ 100’s correction have more room to run?


Site by Pink Green
© ADSS 2024


Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.

ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.

The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.

ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.