Soaring U.S. Treasury yields are further boosting the appeal of bonds over stocks, deepening an already painful equity selloff while threatening to weigh on equity performance over the long term.
Bond yields near historic lows bolstered the attractiveness of stocks over the past 15 years, when the U.S. Federal Reserve kept rates near zero to support the economy following the 2008 financial crisis.
The latest spurt higher in yields, which began this summer, has taken its toll on stock investors. Although the S&P 500 is up about 9% for the year, it has slid over 8% since late July, when it peaked for the year. The 10-year Treasury yield has climbed about a full percentage point since then. Meanwhile, the equity risk premium , which typically pits the S&P 500's earnings yield against the 10-year Treasury yield to determine equities' relative attractiveness, recently stood at 30 basis points, compared with a 20-year average of about 300 basis points, according to John Lynch, chief investment officer at Comerica Wealth Management.
As it stands, S&P 500 companies are expected to increase earnings by 12.1% in 2024, according to LSEG IBES.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
2-year Treasury yield on pace for biggest one-day jump in at least a weekVivien Lou Chen is a Markets Reporter for MarketWatch. You can follow her on Twitter vivienlouchen.
Read more »
10-year Treasury yield: What it is and why it mattersThe 10-year Treasury yield recently hit its highest level since 2007. Here’s what you need to know.
Read more »
Israel resists U.N.'s calls for ceasefire as Hamas says Gaza death toll is soaringThe worsening humanitarian crisis in Gaza is drawing condemnation from world leaders.
Read more »
Buying a home now 50% more expensive than renting, thanks to soaring mortgage ratesIt's a lot cheaper to rent than to buy a home right now in the United States.
Read more »
Meta Q3 revenue surges to $34B on advertising demand, sending shares soaringThe company also trimmed its 2023 total expenses view to $87 billion to $89 billion from its earlier forecast range of $88 billion to $91 billion.
Read more »
Stock Market Today: Treasury rebound gives stocks a lift; mega-cap tech earnings on deckInvestors are waking up to a huge day on Wall Street, with a host of third quarter earnings, PMI data, a 2-year note auction and mega-cap tech updates all on the slate.
Read more »