High Bond Yields Pose These Challenges to Equity Markets

Sherry Qin, Dow Jones Newswires

High government bond yields pose challenges to equity markets, said Charu Chanana, Saxo Markets chief investment strategist, in a note.

Higher yields ask the question: How much are investors will be willing to pay for stocks when safer assets are offering more attractive returns?

Yields also matter because they raise the discount rate used to value future earnings, putting pressure on equity multiples, she noted.