5% isn't 7% - Stocks are fine until they aren’t
Historically, equities have actually handled the 5–6% yield bucket reasonably well.
In months when the 10-year was between 5% and 6% and yields were rising, the S&P still returned an average 0.8%.
At 6–7%, that falls to basically zero.
Once yields were above 7% and rising, average monthly returns turned negative.
https://x.com/joemccann/status/2106555137036837254
Historically, equities have actually handled the 5–6% yield bucket reasonably well.
In months when the 10-year was between 5% and 6% and yields were rising, the S&P still returned an average 0.8%.
At 6–7%, that falls to basically zero.
Once yields were above 7% and rising, average monthly returns turned negative.
https://x.com/joemccann/status/2106555137036837254