Daily Commentary

MarketMinder’s View: Are 30-year US Treasury yields over 5% anything to fret? The long bond last breached the 5% threshold (*checks notes*) in May, to little fanfare. Bond volatility can swing with sentiment, and oil prices’ stoking inflation fears appear to have resurged with the latest Iran war (re-)escalation. As the article lays out, “So far this year, the 30-year has traded beyond 5% for 27 days—or about 19% of all sessions, the most since 2007, according to data compiled by Bloomberg. It traded above that level for 50 days that year. Unlike 2007, however, the Federal Reserve’s benchmark is 150 basis points lower currently, suggesting investors are demanding even more compensation for holding the longest maturity sold by Treasury than at the start of the subprime debt woes. Behind the sustained rise in long-dated yields is growing concern about a deteriorating fiscal picture, just as a deluge of issuance to fund artificial intelligence infrastructure is flooding the corporate debt market. That’s stirring comparisons to the era of ‘bond vigilantes,’ popularized in the 1980s when investors dumped government debt, driving yields higher to enforce fiscal discipline.” We think these are all false fears. Subprime debt, as we wrote yesterday, didn’t cause the global financial crisis—and Uncle Sam’s creditworthiness is rock solid. What moves bonds most? Inflation and inflation expectations, and those aren’t about to run away. Meanwhile, a quick glance at history disproves the notion 5% long bond yields are a tipping point for the economy or markets. 30-year yields were well over 5% for most of the 1980s and 1990s—not exactly a terrible time for economic growth or stocks. Indeed, this article worries wide spreads between short- and long-term rates—indicating a steep yield curve—mean “investors are demanding even more compensation,” but looking at the bigger picture, that is a positive. This suggests hearty bank loan profitability, incentivizing more lending, economic activity and growth. We mean, would the piece prefer an inverted yield curve, when short rates top long? That is a classic, if imperfect, recession warning. Articles like this handwringing over shadowy “bond vigilantes” behind routine rate volatility and the normal, healthily sloped yield curve just shows the bull market’s wall of worry has bricks left.

MarketMinder’s View: Korean stocks may be a bit over their skis, but fundamentals for this global technology hub remain robust, suggesting a frothy local market isn’t masking broader deterioration. “South Korea’s exports rose 52.3 percent from a year earlier in the first 20 days of July as overseas shipments of semiconductors nearly tripled amid the ongoing artificial intelligence boom, customs data showed Tuesday.” It wasn’t just semiconductors booming. Petroleum products, steel and ships also rose strongly, although Korean car shipments fell. Now, these data aren’t adjusted for changing prices, so take them with a grain of salt. And again, even booming data could struggle to meet lofty domestic investor expectations in this Emerging Market. But overall, they show ongoing global demand—and growth—aren’t diminishing, helping drive sales and profits up and pushing global stocks higher.

MarketMinder’s View: Often overlooked when chasing returns: liquidity. Private equity has long touted rich rewards with lower volatility outside the glare of public markets. Problem is, that narrative was quite frequently illusory. Many buyers who didn’t do their due diligence are now finding out. “The net asset value of U.S. private-equity assets stuck in funds at least a decade old reached an all-time high of $348.5 billion at the end of 2025, according to PitchBook data. That is 3.5 times the amount in 2015 and more than 100 times that of 2005. The slowdown in private-equity sales has fueled frustration among investors eager to cash out. Many managers of funds launched in the mid-to-late 2010s struck deals for their existing portfolio companies at the peak of the market in 2020 and 2021, when interest rates were nearly zero. Buyers are now unwilling to pay peak prices at higher borrowing rates, leaving those funds stranded past their typical lifespans.” Lack of transactions—and visible pricing data—don’t mean stable value. Rather, they mean the assets are opaque, a hallmark of illiquidity. While perhaps fine in a heady market upswing—when investors may ignore key investing attributes—that can come back to bite when the tide goes out. With the sentiment cycle maturing, now is the time to focus more on basics like liquidity, especially as Wall Street attempts to peddle private equity to potentially unsuspecting buyers.