Bond yields dominated the week — and most published research now argues "higher for longer" is a feature, not a bug.
The prevailing view across analysts: US 10Y yields are climbing because nominal growth is running hot (~6.6%), AI-related capex is soaking up capital, and deficits need financing — not because of an inflation scare. Several notes flagged 5% as a line in the sand, with a sloppy auction and hawkish Fed minutes potentially opening the door to 5.5%. Mortgage rates near 7% were described as a new floor rather than a ceiling.
Equities stayed constructive despite the rates backdrop. Seasonal Q4 tailwinds, buybacks and resilient earnings underpinned published year-end S&P targets around 7,900, with a mid-2027 target of 8,400 cited. A rotation call favored small caps and value over crowded growth.
Not everyone agreed: a contrarian thread warned that rapidly widening high-yield spreads signal credit fracturing, with 2027 flagged as risky for both stocks and bonds. In Europe, France drew particular concern as its spread over Bunds widened on budget worries. Gold and oil were highlighted as structural hedges.