Morgan Chase: 5 per cent or risk to the stock market

On 2 September, Grace Peters, head of the Morgan Chase Global Investment Strategy, stated that the continued rise in bond yields posed a key risk to the global stock market as the global stock market ushered in its historical weakness in September. Peters expects that there will still be room for further rises in the United States and European stock markets this year, but she warns that the stock market may still experience a 5 to 8 per cent reversal as risk events, such as the United States mid-term elections, approach in November. This would be a healthy echo, not a structural deterioration of the market. Rising bond yields have become a major concern for equity investors. There is growing concern in the market that rising oil prices will push inflation up to 4.8 per cent of the 10-year United States Treasury debt, approaching a level of 5 per cent that is usually considered unfavourable to the stock market; at the same time, the 30-year United States debt return has risen to its highest level in 19 years. The market is increasingly speculating that policymakers will be forced to raise interest rates, thus pushing the rate of return back to the level before the United States finance minister, Becent, scaled up to control long-term borrowing costs。