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“It takes a major risk off the table, and it’s very difficult to be bearish.”
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It was David Tepper, a billionaire investor and one of the world’s leading hedge fund managers, who told CNBC on Monday that market participants could start to ease off as Japan may soon become a renewed buyer of US bonds. US state following a surge in yields. This would serve to stabilize a surge in yields that confused investors. Bond yields and prices move in opposite directions.
Tepper, the founder of Appaloosa Management, has one of the best backgrounds among active investors and his remarks often move the markets. Stock index futures reduced or wiped out losses following his remarks.
A rise in Treasury bond yields linked to expectations that a series of aggressive fiscal stimulus combined with a wider reopening of the economy will boost inflation has helped fuel a powerful rotation away from growth-oriented stocks, including technology-related securities, to become more sensitive to equity and sector cycles.
The yield on the 10-year Treasury bill continued to rise on Monday, rising 3.2 basis points to 1.587%. Shares were mixed in early trading, with the Dow Jones Industrial Average DJIA,
up 105 points, or 0.3%, at the start of activity, while the S&P 500 SPX,
nudé 0.1% less and the Nasdaq Composite COMP, very technical,
lost 0.7%.
Tepper said he expected returns to make the most of their move and likely be more stable in the coming months, making it “safer to be in equities for now,” reported CNBC.
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