Reply #2: Bonds stifle tech [View All]

The sharp rise in bond yields is especially bad news for tech investors.

In just two months, the yield on the 10-year Treasury note has jumped from a 45-year low of 3.11 percent all the way up to 4.6 percent, its highest level in over a year. While equity types weren't terribly concerned about what was happening in the Treasury pit at first -- if anything they showed a touch of schadenfreude at seeing the bond guys take some lumps -- the selloff has become so relentless that it is now the stock market's number-one worry.

The Treasury selloff, after all, doesn't do the economy a lick of good. With the backup in yields there has also been a backup in mortgage rates. As a result mortgage activity has fallen back to year-ago levels and much of the juice consumers have been using to keep the economy going has been taken away. Most economists reckon that the economy still has the wherewithal to recover, but they also warn that it has become more vulnerable to shock.

But for tech in particular, the bond selloff raises other concerns.

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