IHL 0.00% 4.1¢ incannex healthcare limited

IHL - INCANNEX - HOLDERS RESEARCH, page-1074

  1. 1,958 Posts.
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    As @rhino78 alluded to in a recent post.

    All eyes are on the 10-year US Gov't Bonds to see where Biotechs are heading next!

    Ten-year US Govt Bonds 52 Week High 6/10/23 - 4.887% Currently 4.558 (Are they topping out?)

    Inversely

    XBI S&P Biotech ETF 52 Week Low 4/10/23 - 69.09
    Atai 52 Week Low 1.14 - 4/10/23 1.22
    Compass 52 Week Low 6.07 Currently 6.07

    • Biotech stocks faced challenges in the first half of the year, with the Nasdaq Biotechnology Index losing 3%, compared to strong advances in the broader market.
    • The direction of the 10-year bond yield has become a key predictor of biotech industry performance.
    • Sustaining high yields without triggering an economic slowdown will be a challenge.
    • Strong M&A activity for biotechs has been a bright spot and should further strengthen into the end of the year.
    • Biotechs to perform better later in the year as the yield uncertainty diminishes and prospects for a rate cut next year improve.



    https://hotcopper.com.au/data/attachments/5647/5647331-cb19be1981d99e73f8dab6218f513edb.jpg
    The inverse relationship between bond yields and biotech performance is evident in the above chart.

    The Federal Reserve's rate hike campaign led to an early decline in biotech stocks, and over the past year, biotech indexes have consolidated within a certain range.

    As the Fed prepares to conclude its rate hike campaign, the 10-year yield is expected to stabilize or even decrease, albeit not necessarily rapidly.
    As the expectation has now set in that inflation can be curbed without sending the economy into a recession, the longer-term yields are inching higher on bets of a stronger economy.

    Recent months have seen the 10-year yield inch higher, from 3.3% in early April to around 4.1%, nearing its highest level since 2008.

    Given this strong correlation, predicting biotech performance now relies on anticipating the direction of the 10-year yield.
    However, due to the diverse range of variables, making this yield call is far from straightforward.

 
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