Long-term Treasury yields are likely to fall by the end of the year, but it may not keep stocks and corporate bonds rising, according to Capital Economics.
But the situation is unlikely to hold, Hubert de Barochez, market economist at Capital Economics, wrote in a recent note. While Treasury yields may continue to fall, “we think that Treasuries’ relationship with corporate bonds and equities will break down in the near-term, before reasserting itself next year,” de Barochez said.
For corporate bonds, a further decline in risk-free rates could be offset by widening spreads, as economic conditions deteriorate, according to de Barochez. The equity risk premium, or the compensation investors can earn on stocks versus the risk-free U.S. Treasury rate, is likely to rise, meaning that the earnings yield also goes up, thus earnings per share would fall.
Colombia Últimas Noticias, Colombia Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
Fuente: MarketWatch - 🏆 3. / 97 Leer más »
Stock Market Today: Stocks higher, Treasury yield slide on dovish Fed rate signalsU.S. equity futures edged higher Wednesday, with stocks looking to extend their recent run of gains to a fourth consecutive session, as markets react to more dovish rate signals from Federal Reserve officials heading into the start of the third quarter earnings season. While maintaining a close and ...
Fuente: startelegram - 🏆 248. / 63 Leer más »