Bonds need to avoid 'line in the sand' at 5% yields to keep stocks afloat

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As high bond yields drive stock action, one of Bank of America strategist believes yields above 5% could be what sends stocks materially lower.

But as yields retreated lower from their 16-highs before hovering above 5% for an extended period of time and the S&P 500 stayed afloat above 4,200, Bank of America strategist Michael Hartnett believes we've found resistance in the current bond-driven dynamic.

Importantly Hartnett notes other headwinds haven't derailed the market amid the bond yield concerns. Recent economic data has displayed the preferred Goldilocks characteristics of not being too "hot" or too "cold." The September jobs reportwith job additions but also that wages increases are easing, indicating the consumer's willingness to pay for higher prices could be weakening.

He noted that clear signs a small business credit crunch causing higher unemployment could be another bearish sign for stocks. The stock market seems to be heading towards longer-term bear momentum. It's time to bear-proof your portfolio with these resilient stocks. The post Bear-Proofing Your Portfolio: Resilient Canadian Stocks to Consider Now appeared first on The Motley Fool Canada.CALGARY — Exxon Mobil Corp.'s acquisition of Pioneer Natural Resources in a US$59.5 billion mega-deal is being seen by some as a massive vote of confidence in fossil fuels that also bodes well for the Canadian oilpatch.

 

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