Rate Shock
Stock Buyers Lose Bond Foundation for Steep Valuations
Climbing 10-year Treasury yield puts pressure on equity risk premium.
Photographer: Spencer Platt/Getty Images
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Apologists for high U.S. stock prices just lost their favorite defense.
Ten-year Treasury yields rose above 3 percent on Tuesday for the first time since 2014, and bond investors are hysterical. Chris Verrone, head of technical analysis at Strategas Research Partners, told Bloomberg Television on Monday that breaching 3 percent would ring in “a 35-year trend change in bonds” in which investors in long-term bonds would stop making money.