Bond sales this week will be 'litmus test for potential market dysfunction'

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Markets are stressing over the risks associated with rising Treasury yields

China’s Great Withdrawal

But the bigger question is how does Beijing withdraw pandemic stimulus and avoid asset bubbles without upsetting the economy and twitchy financial markets. Data on Sunday showing February exports grew at a record pace from a year earlier when COVID-19 battered the world’s second-biggest economy while imports rose less sharply did little to move the needle. Money supply data due out later this week will be scrutinized for froth levels in the banking system.Article contentAfter the slide in tech stocks, one fund that bears watching is Cathie Wood’s US$23 billion ARK Innovation fund which has fallen more than the market in recent days.

But tech companies are acutely sensitive to higher bond yields, leaving the ARK fund — and others like it — vulnerable to a performance hit and outflows. Wood’s heavy exposure to illiquid stocks could turn out to be an issue.European and U.S. equity returns are running neck-and-neck in 2021 but after five years of underperformance, European stocks may have just enough tailwind to win the 2021 race.

 

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