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Strategies & Market Trends : News Links and Chart Links
SPXL 212.36-3.3%Nov 6 4:00 PM EST

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To: Les H who wrote (29293)5/25/2025 8:24:26 AM
From: Les H   of 29592
 
Rising bond yields give stock-market investors the yips. Watch these levels.

By William Watts

Published: May 24, 2025

A 10-year yield above 4.5% has historically been a problem for investor sentiment, said Larry Adam, chief investment officer at Raymond James, in a Friday note, observing that the level also coincides with a 7% 30-year mortgage rate, which could put additional strain on housing demand and activity in the broader economy.

Moreover, stock-market valuations tend to move inversely to interest rates, with the S&P 500’s price-to-earnings ratio struggling to expand, or even contracting, when the 10-year yield moves above 4.5%.

“A move toward 4.75% would be even more concerning, as equities have typically underperformed at that level,” he wrote. “Taken together — with rising yields and the likelihood of further downward in consensus EPS estimates — we believe our more cautious stance on equities is justified.”

marketwatch.com
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