How resilient stocks are to rising yields

Frankfurt A year ago, investors agreed that if the yield on ten-year US government bonds rose above the two percent mark, this would trigger a correction on the stock market. The reality is currently different.

The majority of fund managers regularly surveyed by Bank of America said the broad US stock index S&P 500 would lose 10 percent if yields on 10-year US bonds rose above 2 percent. At that time it was 1.6 percent. In the meantime, it has even risen to 2.9 percent, the highest level in three years.

A leap over the three percent mark is considered likely. But the S&P 500 has gained around eight percent in the past twelve months. There have been losses in the meantime, but there is no sign of a switch from equities to bonds.