The 10-year US Treasury yield (^TNX) has risen to a 14-month high of 4.79%, putting pressure on stock prices and creating competition for stock investments.
WisdomTree Global Chief Investment Officer Jeremy Schwartz joins the company look for trends Discuss how the psychological aspects of 5% yield affect stock valuation. Additionally, the market faces risks due to inflated earnings growth expectations (16-17% in 2025).
Schwartz discusses the possibility of further rise in the 10-year Treasury yield. “We have been saying for some time that it could be five years to five-and-a-half years. You know, the upper end of that range is the Fed not cutting rates and the normal 10-year premium to the Fed. That's about 125 basis points,” he explains. “Then it would be right around that 5.5 level. If the Fed doesn't cut rates, it's more likely to be 1 in 5.4.”
Looking ahead, he said, “Analysts are currently expecting earnings growth of about 16-17%. In the last two years, when we had a very good, healthy market, it was less than 10%, and 8-9%. It was,” he said. Revenue growth rate (%) for each of the past two years. ”
Schwartz also said he prefers value stocks and recommends the WTV fund, which offers a lower price-to-earnings ratio, strong stock buybacks and an 8% earnings yield.
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This post was written by Josh Lynch
