AI Summary
5 min readThe stock market is near an all-time high, yet more than 70% of stocks in the S&P 500 are at least 10% below their own highs. The only other time that happened in the last 30 years was right before the dot-com bubble burst. Meanwhile, the 10-year Treasury yield has surged from 4% to 5.2% in a hurry, and the VIX—the market’s fear gauge—sits at 16, a level that signals complacency, not panic. The hosts of the Animal Spirits podcast describe this as a market full of doubt but devoid of fear, and they spend the episode trying to make sense of a contradiction that has no clean historical precedent.
The Rate Conundrum: Why Higher Yields Haven’t Broken Stocks
The central question of the episode is whether rising interest rates will finally trigger a meaningful stock market sell-off. The hosts walk through the obvious historical parallels: the Fed raised rates before the dot-com bust, before the Great Financial Crisis, and before the 1929 crash. The Japan bubble popped when the central bank tightened. The logic is clear—higher rates raise the hurdle rate for risk assets and should compress valuations.
Continue reading the full summary in the app — free to try.
Read Full Summary →Free • No credit card required
Never miss an episode of Animal Spirits Podcast
Get every new episode summarized in your inbox — free, ~5 minutes to read.
No spam. Unsubscribe anytime.
What you'll learn
- 1 (00:04) **Sponsorship Segment** - White Charts and Janice Henderson advertisements
- 2 (01:17) **Opening Thesis: Will the Market Sell Off on Rates?** - Michael and Ben frame the central tension: rising rates as a classic market excuse, but the market isn't taking it yet.
- 3 (02:56) **Valuation Compression: No Premium in AI or Anywhere Else** - Duality Research shows multiple compression across nearly every sector, with AI valuations back to historical averages.
- 4 (04:23) **No Fear in Defensives: Staples and Utilities at Multi-Year Lows** - JC's charts show investors are not hiding in traditional safe havens, confirming doubt without fear.
- 5 (05:07) **The Weird Market: Index Near Highs, Most Stocks Down** - Jason Gepford's data shows an extreme divergence: the S&P 500 near all-time highs while 70% of stocks are 10% below their highs.
- 6 (07:34) **The Bull Case for Rising Rates: Economic Growth** - The counter-argument to a rate-driven sell-off is that rates are rising because the economy is booming.
- 7 (09:21) **No Rules: Stocks Up 19% Annualized Since Rates Bottomed** - Ben shows that since Treasury yields bottomed near 0.5% in March 2020, the S&P 500 has returned 19% annualized, despite rates rising to 5.2%.
+ Full timestamped outline available in the app
Show Notes
On episode 484, Michael Batnick and Ben Carlson discuss: the stock market has an excuse to sell off, valuations are falling across the board, the cause of the next correction, 5% bond yields, the worst bond market of all-time, incomes are rising, the wealth effect is real, AI personal assistants, the Consumer Inertia basket of stocks, 7% mortgage rates, the fall of the creative class, the 100 best TV shows this century and more.
This episode is sponsored by YCharts and Janus Henderson Investors.
Sign up for The Compound newsletter and never miss out: thecompoundnews.com/subscribe
Follow Us On Social Media:
Find complete show notes on our blogs:
Ben Carlson’s A Wealth of Common Sense
Michael Batnick’s The Irrelevant Investor
Feel free to shoot us an email at [email protected] with any feedback, questions, recommendations, or ideas for future topics of conversation.
Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for i
More from this podcast
Animal Spirits Podcast →