An Alternative to ‘No Alternative’: How Bonds Snuck Up on Stocks
- Fed model shows bonds are most attractive to stocks since 2010
- Yields fueled by trillions in fiscal aid, Fed on sidelines
Front of Federal Hall near the New York Stock Exchange (NYSE) in New York.
Photographer: Michael Nagle/BloombergThis article is for subscribers only.
A common narrative in markets is that with global rates so low, equities are the only game in town for investors with an appetite for upside. But after the worst selloff in Treasuries since 1980, the edge for stocks is starting to dull.
While yields are still low relative to history, the mantra of “there is no alternative” is losing its pull with 10-year Treasury rates nearly 80 basis points higher than they started in 2021.