A rise in Treasury yields, indicates a drop in Treasury Prices. Since Bond prices and equities are typically positively correlated, a rise in yields (or drop in prices) is a bearish signal for Equities.
As yields increase down the curve, this is suggestive on rising rates. This is not positive for equities.
The negative correlation between yields and equities is true over the longer term, and while the correlation may have been disrupted since the GFC, this increase suggests the market is seeing potential reflation - which will lead to the Fed raising rates. Something which equities don't like.
erfant
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What the hell are you talking about.
Cash coming out of the debt market equals and increase in yields.
An increase in yields mean's RISK ON, money going into equities.
Not the other way around.
The negative correlation between yields and equities is true over the longer term, and while the correlation may have been disrupted since the GFC, this increase suggests the market is seeing potential reflation - which will lead to the Fed raising rates. Something which equities don't like.