Nasdaq Sensitivity To Ten Year Yield Analysis

Good Morning,

Is anyone else concerned what will happen to the Nasdaq and Russell when the Ten Year Yield normalizes prior to the next auction date?

The Russell and Nasdaq have historically had higher volatility than the Dow and S&P and are more sensitive to interest rate fluctuations. I am concerned their increased volatility could lead the market downward. It looks like the majority of the market is as well. Over the past two months, these indexes have been lagging. The below academic analysis is not suggesting this is a buying a opportunity, my guess is we are close to reaching summer highs, but I am not offering investment advice.

Even with the current economic conditions I expect the typical summer rotation into value to occur and am concerned about holding positions in small caps and the Nasdaq save for those companies with reasonable price to earnings per share metrics that have net income growth over the past few quarters.

That is not to say, I do not appreciate the donations from the rest of the market. The below picture sums up the feeling I get when The Nasdaq Inexplicably bails out one of my positions(valued by expected future earnings per share vs current price as opposed to Price Per Click) by stretching the valuations of the entire market.

Picture From Fast Five

SensitivityAnalysis.xlsx

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Warmest Regards,