Stocks ignoring higher bond yields cannot last very long

Macro
โดย Yahoo Finance·Read original
Summary · why it matters

Stocks have been overlooking a sharp rise in bond yields, but that divergence cannot persist for very long. Treasury yields surged last week, with the 10-year hitting an 18-month high and the 30-year reaching its highest level since 2007, following a Federal Reserve decision to hold rates steady that Wall Street viewed as dovish and confusing. Brian Mulberry, chief market strategist at Zacks Investment Management, warned that sustained higher rates raise the cost of capital, making future profitability more difficult even for major companies like Google, which are issuing debt and shares. He noted that financial conditions are tightening on their own as markets price in a riskier inflation environment, reducing reliance on Fed forward guidance.

Impact on stocks 4

Artificial Intelligence▼ · 1 stocks
Alphabet Inc Class C
GOOG
▼ NegativeMonetaryrelevance

Higher bond yields raise cost of capital, making future profitability harder for Alphabet.

Others▲ · 3 stocks
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