has moved about 20 basis points since the start of the year , and was at 1.13% Monday. Still relatively low, the yield is at the highest it's been since last March, but in itself the yield is not a problem.
"I think the path of least resistance...is still up...The technicals supporting this market are strong, but if you're looking for warning signs there are some warning signs coming out of the fixed income market," said Mohamed El-Erian, chief economic adviser at Allianz. "In the last few weeks, we made the leap to rising rates being neutral, to rising rates being positive, to today where you can argue that rates moving higher from here is likely to be a headwind for stocks, particularly high growth, high P/E stocks," said Julian Emanuel, head of equities and derivatives strategy at BTIG. Emanuel notes investors have already begun the shift away from high growth to value over the last several months.
Strategists say it's even more important for corporate earnings to be strong in an environment of rising yields. Strategists at both Goldman Sachs and Morgan Stanley Monday warned that higher interest rates could put a lid on market gains.
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