Homrich & Berg says rising bond yields above 5% pressure equity valuations as Fed hikes again
- Homrich & Berg flagged bond-market pressure as Treasury yields climbed above 5%, forcing the Fed to hike with markets pricing another hike.
- Higher yields risk compressing equity multiples, with small caps down 5.4% in September versus roughly a 0.5% drop in the S&P 500.
- Fuel inflation emerged as a key earnings headwind, with more than half of S&P 500 industries seeing 3Q EPS growth forecasts cut.
- Municipal bonds fell about 5% for the month, the biggest monthly loss since 1987, amplified by thin liquidity.
- WTI crude peaked at USD 105/bbl mid-month, still just above USD 90/bbl, raising consumer-risk concerns into the holiday season.
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