PLUG stock has been hammered over the past few weeks because of fears related to a sharp rise in long-term bond yields. The basic thinking is that, as long-term yields rise, equity valuations will correct lower, because stocks and bonds are competing investment vehicles, so as bond yields rise, the required rate of return on stocks rises, too.
That thinking makes a ton of sense. And if yields were to rise forever, then I’d say growth stocks like PLUG stock will keep plunging.
But yields aren’t going to rise forever. Instead, it looks like the 10-Year Treasury yield will max out around 2% over the next few years.
The Fed has reiterated multiple times that they will not move on interest rates anytime soon. Thus, the 3-Month Treasury yield will remain near-zero for the foreseeable future. Real GDP growth is expected to jump to 4% this year in a sharp “bounce-back” year. But normalizing out for Covid-19 noise, real GDP growth in 2022 and after is expected to hover around 2%.
Thus, normalized, the 10-Year yield should settle around 2% and remain there for most of 2022 and 2023.
The world is pivoting toward clean energy. By 2050, we will live in a world powered end-to-end by renewable energies.
One of those core energies will be hydrogen, since it has certain innate scientific advantages from being the lightest element in the universe that render it the most cost-efficient clean energy solution.
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