Thursday, September 19, 2019

Growth in bond yields puts pressure

The growth in bond yields puts pressure on the shares of utility companies and the real estate sector in the S P 500

S P 500 today, under pressure from the sectors most sensitive to the dynamics of interest rates. The yield on 10-year US government bonds rose by 0.07 percentage point to 2.388%. Already yields rose by more than 1 percentage point to a record low reached in July. This has a negative effect on the share of utility companies, which fell by 0.8%, and securities of companies engaged in real estate transactions, which decreased by 1%. Now, these sectors show a very weak trend in the S P 500. The overall index has lost 0.2%. Shares of companies sensitive to the dynamics of interest rates, especially popular earlier this year amid falling bond yields - higher dividends paid by these firms, making them an attractive alternative to bonds. However, rising interest rates led to the opposite dynamics. Utilities sector fell by 3.6% the previous month, while the real estate sector has lost 5.9%.





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