Bond Market Unlikely to Halt Stock Rally, Investment CEO Says

Treasury yields remain elevated, but the bond market is not yet in the “danger zone” for stocks, according to Nancy Tengler, CEO of Laffer Tengler Investments.

Treasury yields often influence stock valuations, particularly for growth stocks. 

Speaking to Yahoo Finance, Tengler said investors are continuing to support equities despite higher borrowing costs.

Late last week, the 10-year Treasury yield dipped to 4.5%, while the 30-year yield edged down three basis points to 5.09%.

Although the 30-year yield remains above the psychologically important 5% level, stock indexes have continued to perform strongly, with the Dow at record highs and the S&P 500 and Nasdaq approaching historic peaks.

“If we stay in a range around 5% — or certainly below is better — you will see investors return to stocks,” Tengler said, adding that slowing earnings growth and shrinking corporate profit margins pose greater risks to the bull market than bond yields.