Hello everyone, we welcome the God of Wealth on the fifth day of the Lunar New Year. I wish you lots of wealth and good luck. U.S. stocks rose or fell overnight, with the Nasdaq and S&P closing up, while the Dow fell slightly. Amazon rose 13.54%, its largest single-day gain since

Hello everyone, we welcome the God of Wealth on the fifth day of the Lunar New Year. I wish you lots of money and good luck.

U.S. stocks rose or fell overnight. The Nasdaq and S&P closed higher, while the Dow fell slightly. Amazon rose 13.54%, its largest single-day gain since 2015.

At the same time, Hong Kong stocks rose sharply yesterday in the Year of the Tiger, with the Hang Seng Index closing up 3.24%.

It is worth noting that U.S. bond yields surged across the board last night, with the 10-year U.S. bond yield rising 9.86 basis points to close at 1.9148%, a new high since 2020.

Why is the 10-year U.S. Treasury yield so much focused on by investors? The U.S. 10-year Treasury bond yield is also called "nominal interest rate" or "risk-free rate of return." Nominal interest rate = real interest rate + inflation expectations. Therefore, rising inflation expectations and real interest rates may lead to an increase in nominal interest rates, and this rise in U.S. bond yields is caused by an increase in real interest rates (rate increases).

Most Fed officials said that if U.S. inflation stabilizes at the 2% target level, then real interest rates should eventually stabilize around 0.5%, and then nominal interest rates should be 2.5%, indicating that the Fed may raise interest rates by 50 basis points in March. , and the rise in 10-year U.S. bond yields reflects expectations of interest rate hikes in advance.

At the same time, the U.S. bond yield is also a key factor in the stock valuation model, because an increase in the risk-free rate of return will lead to a reduction in investors’ risk appetite. When investing in risk-free assets can bring good returns, investors There is no need to take risks in pursuit of returns. Funds will flow out of the stock market, which will trigger a correction in the stock market.

There are various signs that the Federal Reserve may be certain to raise interest rates in March. The only suspense is whether to raise interest rates by 25 basis points or 50 basis points. Therefore, the biggest risk in the external market this year may be the Fed's interest rate hike, and we have to always be vigilant about this risk factor.

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The above suggestions are for reference only and do not constitute investment advice.