Bears are throwing a stagflation tea party after yesterday’s market headlines, as the rise in US bond yields heralded yet further drops across global equity markets. The yield on US 10-year treasuries passed the key 1.50% level for a second day to close at 1.53%, its highest since June. The hawkish turn by the Fed and other central banks, amid high inflation caused by surging energy prices and slower economic growth, saw investors bet on impending interest rate increases and double down on a move out of equities. “The main market narrative is one of stagflation,” said Swiss bank Lombard Odier’s chief economist.

The looming threat of a US government shutdown and a possible default next month also weighed on stocks.

All of this caused US stocks to have their worst day’s trading since May: The benchmark S&P 500 fell more than 2% during the day, but harder hit was the Nasdaq, which closed 2.8% in the red as tech stocks felt the force of the bond market sell-off. European markets also nursed losses, with shares in France, Germany, Spain and Italy all falling more than 2%.

The price of Brent briefly breached the USD 80 per barrel handle for the first time in three years, before being pulled back towards USD 79 by the equity rout.

ALSO WORTH NOTING-

The Arab Petroleum Investments Corporation (Apicorp) was expected to raise USD 750 mn from a sale of five-year green bonds yesterday, according to a document picked up by Reuters. The proceeds will be used to support green projects in Apioorp’s Green Finance Framework. The lender had not announced the results of the sale as of dispatch time this morning.

THE CLOSING BELL-

The EGX30 fell 0.5% at yesterday’s close on turnover of EGP 1.2 bn (24.5% below the 90-day average). Local investors were net sellers. The index is down 3.7% YTD.

In the green: Abou Kir Fertilizers (+2.7%), Ezz Steel (+2.6%) and GB Auto (+2.5%).

In the red: MM Group (-3.4%), Fawry (-3.1%) and Cleopatra Hospitals (-3.0%).