Leaping treasury yields will slash demand for stocks, predicts market veteran

CNBC/Stephanie Landsman/4-22-2018

“‘If you take a look long-term, where the 10-Year Treasury typically trades, it matches nominal [economic growth],’ [Cresset Wealth’s Jack] Ablin said. ‘And, the last nominal [growth] number we got in December of last year suggested that the 10-Year Treasury should be about 4.1 [percent] not 2.9,’ he added. Stocks historically become less attractive as yields move higher. In the easy money environment since the financial crisis, low yields created great demand for stocks.”

MK note:  Though Ablin’s analysis argues in favor of exiting stocks, I fail to understand how it argues favorably for acquiring bonds.  But then again, maybe I’m missing something. . . . . .

 

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