Markets mixed, “lasting and painful downtrend” may have begun

Markets were mixed on Wednesday.

The STOXX Europe 600 fell 0.8 percent and the Nikkei 225 fell 0.3 percent but the S&P 500 recovered from early losses to end the day up 0.2 percent.

The US 10-year Treasury yield climbed above 3 percent to hit its highest level since December 2013.

“Earnings have been coming in very strong, but companies aren’t getting rewarded,” said Michael Mullaney, director of global market research at Boston Partners. Nevertheless, he said that earnings growth “is something that we should expect to resume showing up in share prices”.

In contrast, Tomi Kilgore at MarketWatch noted that Tom McClellan, publisher of the McClellan Market Report, has declared that a bear market has begun.

McClellan was quoted as saying in his report that a downturn has begun and that “it should be a lasting and painful downtrend, heading down toward a bottom due in late August”.