US 10 year yield is a major surprise for me. I did not expect it to decrease like that, given the inflation trend and QT. So, it means that we are closer to the bottom for shares if there is no change in profit expectation. Based on median Shiller PE (adjusted for long term rates), the downside potential for the market is now around 29 % (vs around 40 % earlier). However, we have probably to take into account also a decrease of earning expectation, given that there is a higher probability of a recession which does not seem to be discounted in earnings expectations.
Given this trend for long term rates, I expect the rotation in favour of tech* to continue.
* for the ones where we expect structural growth, like profitable SAAS companies, not semiconductors which prove to be very cyclical once again.
