The Stock Market and Bond Markets are Hitting Historical Records. Both Cannot Continue Long Term. Which Will Break Down First?
Podcasts > Your Personal Bank with Ferenc Toth
Monday, August 17, 2026
The S&P 500 recently hit a new all time high. The index has doubled since 2023.
The 30-year treasury recently exceeded 5%, the highest level since 2007. The bond yield has been increasing since 2020.
The stock market has been led by a few tech companies. Stock prices are driven by sentiment. Sentiment can change quickly.
Bond yields are rising due to federal debt. As long as the government continues to spend more than it receives, bond yields will keep increasing. Until Congress stops spending more than it receives, this will continue. There is no sign of this changing in the foreseeable future.
Higher interest rates are typically bad for the stock market. Higher interest rates increase the costs to borrow and expand business. Profits typically decline.
Both cannot continue rising long-term.
My bet is the stock market will decline before the bond market. The bond market is significantly larger than the stock market. The driver of increased bond yields is not changing.
This creates significant risk and opportunity.
This is the Golden Era of Fixed Assets. Fixed index annuities are generating the highest returns in decades due to the higher bond yields.
