Stock Market Correction?
Quantitative Finance
Level
1
What cause the stock market correction?:
a) Treasury Bonds Yields
b) Inflated market
c) The suits
(b) and (c) only
(a) and (b) only
(c) only
(a) and (c) only
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1 solution
The simple reason why there was a correction was for the Treasury bonds (Big short of Bonds) due to the stimulus and how we see that it is approaching and the inflation in the market has been too much because all this was that the "big ones" stopped buying this type of bonds. so the supply was through the roof and the market rose because they stopped buying both long and short bonds and preferred the euphoria of the market so much supply lost the bonds and the yields rose (demand) and this correction happened since as we know they sold and we bought high-yield bonds and this in itself helps the recovery of sectors such as travel, hotels, retail, among others (that is why we did not see a big correction in these, only in the Nasdaq).