Yield quagmire is playing havoc with S&P 500 valuation models
The longer bond yields stay stuck, the jumpier the stock market seems to get. Heading into a historically volatile month, that's the heart of the dilemma facing equity investors as they try to balance divergent signals on valuations and growth.
By Vildana Hajric / Bloomberg
On one side is the claim that very low interest rates make stocks worth more by boosting the value of future profits. Against that is an equally plausible view that falling yields denote pessimism about the economy that make stocks less valuable in anticipation of sluggish growth.
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