Stocks and Treasuries both got shellacked again yesterday amid heavy selling in the global debt markets. That said, equities, gold, and silver are stabilizing this morning – at least momentarily. Crude oil is lower.

On the news front...

I’m beginning to sound like a broken record here. But it’s interest rates. It’s ALWAYS interest rates (and a higher dollar). That’s what Wall Street is watching. That’s what Wall Street is worrying about. And until the fever breaks, stocks are going to have a rough go of it.

The yield on the 30-year Treasury Bond breached 5% to the upside overnight. The 10-year topped 4.8%, its highest since 2007. The Wall Street Journal ran with a lead story called “Why 8% Mortgage Rates Aren’t Crazy” this morning.

Oh, and the dollar’s rally against the Japanese yen went so far yesterday, it appears the Bank of Japan stepped in to keep it from breaching the key 150-yen-per-dollar threshold. As you can see in this chart, the dollar is close to its highest level against the yen since the early 1990s.

USD/JPY Exchange Rate
Source: Google Finance

If there’s some potential good news for stocks heading into year end, it’s the earnings outlook. S&P 500 companies are poised to break a four-quarter losing streak, with Q4 earnings expected to rise just under 8% from year-ago levels. That would come on the heels of a very small expected drop for Q3.

In the political arena, the speaker of the House of Representatives was ousted in a vote forced by hard-line Republicans yesterday. No word yet on who will replace Kevin McCarthy, but it leaves Congress in a state of quasi-paralysis. No House Speaker has ever been voted out in this fashion.