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Money and Finances
Reply to "Treasury Bond Rates vs. Stock Market"
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[quote=Anonymous]I think I understand that when bond rates go up stock prices drop. This is because a bond is a safer investment for the money so when you're earning 0% in bonds stocks are the only option for growth. What I don't understand is why relatively small increases in bond rates of return (like today, bond rate is around 1.53%) lead to relatively big drop in stock market (1.7% to 2.8% depending on which index you look at). 1.53% isn't that much compared to what the stock market returns historically, so why the big drop in the stock market? Or maybe these percentage changes are more significant than they appear to me? Link to article showing the %s I cite. https://www.cnbc.com/2021/09/27/-stock-market-futures-open-to-close-news.html[/quote]
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