Investorideas.com (www.investorideas.com newswire) a trusted platform for investing ideas including mining stocks
issues UK market commentary from deVere Group.
Trump’s real problem is fast becoming the bond market, warns the CEO
of one of the world’s largest independent financial advisory
organisations.
The warning from Nigel Green of
deVere Group
comes as investors dump government debt, oil prices surge, and
Treasury yields climb to levels that are beginning to threaten the
stock market rally Donald Trump has championed throughout both his
presidencies.
The benchmark US 10-year Treasury yield has jumped to 4.631%, its
highest level since February 2025. The 30-year Treasury yield briefly
hit 5.16%, near three-year highs, while the two-year yield climbed
above 4.1%.
Brent crude surged past $110 a barrel as the Iran conflict intensified
and military escalation around the Strait of Hormuz drove a sharp
repricing across energy markets. Roughly 20% of global oil supply
passes through the corridor.
Nigel Green says markets are beginning to connect geopolitics,
inflation and bond yields directly to equity risk.
“Trump has always understood the political power of rising stock
markets. Strong equities project confidence, momentum and economic
success.
“But bond markets are beginning to overpower the stock market
narrative.
“This is now the real risk.”
The deVere chief executive notes that investors spent much of the last
year assuming inflation was fading, rate cuts were approaching, and
AI-driven growth would keep lifting equities higher regardless of the
macro backdrop.
“That confidence is now breaking down. Oil prices are rising sharply
again, and inflation expectations are moving higher.
“Bond investors are demanding greater compensation to hold long-dated
government debt.
“Markets are beginning to price a structurally more inflationary
world.”
“Investors, for years, had little alternative to stocks
because sovereign yields were artificially suppressed and cash
generated almost nothing.
“That environment supported extreme valuations across tech and growth
assets.
“Now investors can earn above 5% in long-dated Treasuries with
materially lower risk than many sectors of the stock market currently
priced for perfection.
“That changes asset allocation globally.”
He warns that the AI and tech rally has masked growing fragility
underneath broader markets.
“A relatively small number of mega-cap companies have carried US
equities higher while underlying market breadth weakened.
“Higher bond yields expose that vulnerability very quickly because
expensive growth stocks depend heavily on cheap capital and future
earnings assumptions.
“The higher yields go, the harder those valuations become to sustain.”
Nigel Green says the White House is now trapped between two deeply
uncomfortable outcomes over Iran.
“If Trump escalates aggressively, markets fear a deeper oil shock that
drives inflation and bond yields even higher.
“If Washington steps back, investors face a prolonged regional
conflict that keeps energy prices elevated for months.
“Neither outcome is particularly supportive for equities.”
He says the bigger issue now extends beyond the Federal Reserve and
into sovereign debt itself.
“This is becoming a debt credibility story as much as an inflation
story.
“The US is running enormous deficits while refinancing costs are
climbing sharply.
“Japan’s 30-year government bond yield has moved above 4.2% for the
first time on record as Tokyo prepares additional borrowing linked to
wartime fiscal pressures.
“Governments across the developed world are trying to finance massive
spending commitments inside a structurally higher inflation
environment.
“Bond markets are demanding a much higher price for that risk.”
The CEO says markets are entering a completely different regime from
the one investors became used to after 2008.
“For more than 15 years, markets operated on cheap money, suppressed
volatility and endless liquidity.
“That era inflated virtually every major asset class simultaneously.
“Now bond markets are beginning to dismantle the assumptions that
supported the entire post-crisis bull market.”
“Trump still wants investors focused on stocks.
“But bond investors are beginning to dictate the direction of global
markets again.”
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