{"id":6640,"date":"2023-03-06T14:23:29","date_gmt":"2023-03-06T20:23:29","guid":{"rendered":"https:\/\/www.keystonefinancial.com\/?post_type=oi_article&p=6640"},"modified":"2023-03-06T14:23:30","modified_gmt":"2023-03-06T20:23:30","slug":"market-commentary-march-7-2023","status":"publish","type":"oi_article","link":"https:\/\/www.keystonefinancial.com\/articles\/market-commentary-march-7-2023","title":{"rendered":"Market Commentary | March 7, 2023"},"content":{"rendered":"\n
Sibling discord.<\/p>\n\n\n\n
Stocks and bonds are two of the better-known asset classes in the family of potential investments. Last week, they were in opposition.<\/p>\n\n\n\n
Bond yields have been moving higher in anticipation of the Federal Reserve raising rates again. For a while last week, every maturity of Treasury \u2013 from the 1-month Treasury bill to the 30-year Treasury bond \u2013 boasted a yield above 4 percent. Some shorter-maturity Treasuries yielded more than 5 percent.<\/p>\n\n\n\n
When bond rates move higher, borrowing becomes more expensive for companies. As the cost of doing business rises, the outlook for company earnings tends to moderate, pushing stock prices lower. (Companies in the financial industry are often an exception because financial companies often benefit from higher rates.)<\/p>\n\n\n\n
In addition, higher bond yields may lead to lower stock prices as investors who seek income, and prefer to take less risk, move some assets from stocks to bonds. For example, more conservative investors who have held dividend-paying stocks to help achieve retirement income goals might choose to move some assets into bonds.<\/p>\n\n\n\n
\u201cRising Treasury yields can make stocks less appealing because they allow investors to park money in instruments that now earn an attractive return\u2026investment grade bonds saw inflows for 10 consecutive weeks\u2026the longest streak since October\u2026,\u201d reported Isabel Wang of Morningstar.<\/p>\n\n\n\n
Like a younger sibling who refuses to follow the lead of an older brother or sister, stock markets ignored rising bond rates last week. It\u2019s difficult to know which one is on the right track, which makes being selective more important, according to Carleton English of Barron\u2019s.<\/p>\n\n\n\n
\u201cThis is no longer a black-and-white, buy-or-sell stock market. The era of \u2018There is no alternative\u2019 to growth-oriented tech stocks is in the rearview mirror, and both stocks and bonds offer compelling opportunities, if you pick the right ones.\u201d<\/p>\n\n\n\n
Major U.S. stock indices finished higher, ending a three-week losing streak.<\/p>\n\n\n\n