Hi guys rasinbunlover here! This is my first post so I’d appreciate your view and a follow if you like my content:)
Came across an interest chart, since March, the US 10Y yield has risen from ~3.95% to 5.28%. Over the same period, $MCD has fallen ~32% from its high. Almost a perfect mirror image
MCD vs 10Y
🔍 Why does McDonald trade “against” yields?
McDonald's is mature, slow-growing, dividend-heavy and carries a lot of debt. So the market prices it partly like a bond:
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Higher yields = its steady future cash flows are worth less today
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A 5%+ Treasury competes directly with its dividend
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Higher rates slowly raise its own borrowing costs
💰 What the selloff has done to the valuation
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Forward dividend yield ~3.3%, the highest in over a decade (dividend just raised to $1.93/quarter)
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P/E at its lowest in about 6 years
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The ~32% drawdown is its deepest since the 2020 COVID crash
🤔 Is 5% actually high?
Not by history. The 10Y has averaged ~5.3% across the decades since the 1950s. In the 1980s it averaged 10.6%, and the S&P 500 still compounded 17.5% a year.
Rates vs Returns by decade (Credit:Adam Khoo)
🎯 My View
I think the 10Y is closer to a peak than a breakout especially with Mr.Trump in charge. If yields ease even modestly, bond-like quality names such as $MCD should be among the first to recover. Meanwhile, you're paid ~3.3% a year to wait.
🧭 The Setup
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Price is back in the ~$215–235 zone: resistance in 2019–2020, support since 2021
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Weekly RSI at its lowest since the COVID crash
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Waiting for a weekly confirmation candle is also an option here.
Mcdonald Weekly Support
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