{"id":1663384,"date":"2022-09-29T01:50:52","date_gmt":"2022-09-29T05:50:52","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1663384"},"modified":"2022-09-29T01:51:26","modified_gmt":"2022-09-29T05:51:26","slug":"analysis-goodbye-tina-higher-yields-muddy-outlook-for-struggling-u-s-stocks","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-goodbye-tina-higher-yields-muddy-outlook-for-struggling-u-s-stocks\/","title":{"rendered":"Analysis-Goodbye, TINA: higher yields muddy outlook for struggling U.S. stocks"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fanalysis-goodbye-tina-higher-yields-muddy-outlook-for-struggling-u-s-stocks%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1663384&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>By Lewis Krauskopf<\/p>\n<p>NEW YORK (Reuters) \u2013     Soaring interest rates are providing investors with attractive alternatives to stocks, complicating the picture for equities in an already-vicious year.<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\">\n<\/div>\n<p>For years, investors could easily justify a preference for stocks because other assets offered paltry returns as the Federal Reserve kept rates at historic lows, giving rise to the acronym \u201cTINA,\u201d or \u201cthere is no alternative.\u201d<\/p>\n<p>The years when TINA held sway were good ones for the U.S. stock market. The S&#038;P 500 gained some 600% from its financial crisis bottom in March 2009 through the end of last year, handily beating a plethora of other investments.<\/p>\n<p>That calculus has drastically changed as the Fed hikes interest rates to stave off the worst inflation in decades, bolstering yields on everything from Treasuries to money markets. That is more bad news for U.S. stocks, as they struggle to regain their footing after a drubbing that has included a 22% S&#038;P 500 drop so far this year. <\/p>\n<p>\u201cAs interest rates continue to rise, there is a greater number of choices to capture total return or income without taking on stock market volatility,\u201d said Michael Arone, chief investment strategist at State Street Global Advisors. \u201cThat will continue to put some downward pressure on stocks.\u201d <\/p>\n<p>Bond yields have soared this year, with the yield on the two-year Treasury bond jumping to over 4.3% earlier this week from 0.73% at the end of 2021. Short-term Treasuries frequently yielded well below 1% for the last 15 years. <\/p>\n<p>The yields on many Treasuries \u2013 which are considered virtually risk-free if held to maturity \u2013 now dwarf the S&#038;P 500\u2019s dividend yield, which recently stood at about 1.8%, according to Refinitiv Datastream.<\/p>\n<p>\u201cThe concept that there is no alternative to stocks is not true anymore,\u201d said Walter Todd, chief investment officer at Greenwood Capital. <\/p>\n<p>There are plenty of signs that yields are drawing investors. State Street\u2019s SPDR Bloomberg 1-3 Month T-Bill ETF, which measures an index of one to three month Treasury bills, as of Friday had taken in net inflows of nearly $9 billion so far this year, more than any other State Street ETF.<\/p>\n<p>Money market funds took in $30 billion in the latest week, according to Refinitiv Lipper, while equity funds, taxable fixed income funds, and tax-exempt bond funds all had net redemptions. Assets in money market funds stood at $4.44 trillion as of the end of August, not far from the all-time high of $4.67 trillion reached in May 2020, according to Lipper.<\/p>\n<p>As bond yields have climbed, stock valuations have weakened.  The S&#038;P 500 trades at a forward price-to-earnings ratio of about 16 times, compared to nearly 22 times at the start of the year, according to Refinitiv Datastream.<\/p>\n<p>\u201cThere was a lot of stimulus around that helped companies when times got tough and when times were good, the low interest rate environment drove pretty high valuations,\u201d said James Ragan, director of wealth management research at D.A. Davidson. \u201cWe are definitely getting a resizing of that now.\u201d<\/p>\n<p>Of course, the alternatives to stocks are far from risk free. Bonds, whose prices move inversely to yields, have endured a brutal 2022, with the ICE BofA U.S. Treasury Index on track for its worst annual performance on record. <\/p>\n<p>Many investors believe bond prices are unlikely to stabilize until there is evidence of ebbing inflation and a pivot in the Fed\u2019s tightening policy. <\/p>\n<p>Investors sitting in cash, meanwhile, could be late to an eventual turnaround in the equity market.<\/p>\n<p>Still, the robust yields are likely to continue presenting a challenge to stocks, investors said. <\/p>\n<p>Fiduciary Trust Company has increased its recommended cash allocation in most of its portfolios to 12% from 2% at the start of the year, said Hans Olsen, Fiduciary\u2019s chief investment officer.<\/p>\n<p>\u201cYou can do some things now where you can actually get paid a reasonable sum of money in order to wait,\u201d said Olsen. \u201cI think it\u2019s a big deal. It\u2019s been a while since we have seen something like this and markets are going to have to reprice this.\u201d<\/p>\n<p> (Reporting by Lewis Krauskopf in New York; Editing by Ira Iosebashvili and Josie Kao)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/uncategorized\/analysis-goodbye-tina-higher-yields\/attachment\/a-wall-street-sign-is-seen-in-lower-manhattan-in\/\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/09\/tagreuters.com2022binary_LYNXMPEI8S07H-BASEIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI8S07H-BASEIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Lewis Krauskopf NEW YORK (Reuters) \u2013 Soaring interest rates are providing investors with attractive alternatives to stocks, complicating the picture for equities in an already-vicious year. For years,<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1663384","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1663384","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1663384"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1663384\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1663384"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1663384"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1663384"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}