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Tipping point

Apr 25, 2024

Today’s Piper Sandler graph reveals the tightrope walk between US interest rates and the equity market. Despite robust inflation figures, investors have remained complacent, until now. But let’s not mistake calm for immunity. With the 10-year bond yield hitting 4.6%, signs of strain are emerging, particularly for lower quality and pricier stocks. The tipping point looms around 5%, where maintaining high valuations for the overall market becomes a struggle. All eyes are on Friday’s inflation data, especially the Personal Consumption Expenditures Index, and the subsequent Fed response.

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