This is a historical scenario capturing the changes in the economy from Oct 1993 to November 1994, when 10-year treasury rates rose from 5.3% to 8%. This rapid rise in rates hit fixed-income investors hard, leading to global bond losses of 1.5 trillion over a one-year timeframe.
SCENARIOS
Tech Bubble
What if tech company valuations normalize, erasing the recent outperformance by the Nasdaq?
The Nasdaq has outperformed the S&P 500 by roughly 10% over the last year
Drop in tech valuations might start in private funding (VCs) and spread to public markets
A mild correction in the Nasdaq might ensue, with lesser impacts on other major equity indices.
Past Crashes
This scenario covers the heart of the global financial crisis, from the collapse of Lehman Brothers until the market lows of early 2009, and examines the max draw downs of key levers over that timeframe.