JPMorgan names 2 stock categories facing the biggest threat

American banking giant JPMorgan Chase has warned that small-cap and mid-cap stocks face growing pressure from rising 30-year government bond yields. The bank’s strategists, led by Eduardo Lecubarri, said rising long-term yields reflect mounting government debt and budget deficits rather than changes in short-term interest rates alone. JPMorgan’s analysis found that countries with public debt exceeding 100% of GDP and ongoing budget deficits account for approximately 60% of global GDP. Rising Treasury yields threaten smaller stocks by increasing borrowing costs, slowing expansion and pressuring valuations.

Source: Finbold