Goodbye, TINA: higher yields muddy outlook for struggling U.S. stocks

  • 📰 globeandmail
  • ⏱ Reading Time:
  • 47 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 22%
  • Publisher: 92%

United States News News

United States United States Latest News,United States United States Headlines

Soaring interest rates are providing investors with attractive alternatives

For years, investors could easily justify a preference for stocks because other assets offered paltry returns as the Federal Reserve kept rates at historic lows, giving rise to the acronym “TINA,” or “there is no alternative.”

“As interest rates continue to rise, there is a greater number of choices to capture total return or income without taking on stock market volatility,” said Michael Arone, chief investment strategist at State Street Global Advisors. “That will continue to put some downward pressure on stocks.” “The concept that there is no alternative to stocks is not true anymore,” said Walter Todd, chief investment officer at Greenwood Capital.

As bond yields have climbed, stock valuations have weakened. The S&P 500 trades at a forward price-to-earnings ratio of about 16 times, compared to nearly 22 times at the start of the year, according to Refinitiv Datastream. Many investors believe bond prices are unlikely to stabilize until there is evidence of ebbing inflation and a pivot in the Fed’s tightening policy.Still, the robust yields are likely to continue presenting a challenge to stocks, investors said.

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 5. in US
 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

United States United States Latest News, United States United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Cineplex approaches rival Cineworld's U.S. franchise for potential mergerCineworld has been struggling to rein in massive debt and this month filed for bankruptcy in the U.S. Read more.
Source: financialpost - 🏆 7. / 85 Read more »

Cineplex approaches rival Cineworld's U.S. franchise for potential mergerCineworld has been struggling to rein in massive debt and this month filed for bankruptcy in the U.S. Read more.
Source: nationalpost - 🏆 10. / 80 Read more »

U.S. stocks drop for sixth session as rate woes persist - BNN BloombergU.S. stocks ended a volatile session lower after a slew of Federal Reserve officials hammered home their resolve to remain aggressive in their fight against inflation.
Source: BNNBloomberg - 🏆 83. / 50 Read more »