In January, Wall Street faces rising yields, with the 10-year Treasury note exceeding 4.6% and the 30-year bond reaching 4.86%, the highest since late 2023. These increases in yields are influencing various loan rates and could undermine expectations for a more accommodative Federal Reserve in 2025. The upcoming December jobs report is pivotal; a stronger-than-expected report may further push yields up, negatively impacting stock prices. Bank of America strategist Ohsung Kwon noted a shift to a “good news is bad news” market environment, highlighting the close correlation between the S&P 500 and Treasury yields. If job growth surpasses consensus estimates of 155,000, yields might climb, sending stocks lower. Conversely, weak job data could lead to a stock market uptick. Additionally, Bank of America downgraded Tesla to neutral due to execution risks and high valuations, while MoffettNathanson downgraded Apple to sell, citing a lack of positive news contributing to its recent stock price increases, with the expectation of a potential 23% decline. Overall, market focus is shifting from growth fears to inflation and interest rate concerns.
