Investing.com –Â A negative correlation between stocks and US government bond yields is likely to persist until the falls back below the 4.50% level, according to analysts at Morgan Stanley (NYSE:).
After retreating from multi-month highs last week following softer-than-anticipated core inflation data, the benchmark 10-year yield edged higher on Friday in response to separate figures showing solid US manufacturing output and single-family homebuilding.
The numbers, along with ongoing uncertainty surrounding the possible impact of President-elect Donald Trump’s policy plans, helped to maintain expectations that the Federal Reserve may slowly roll out potential interest rate reductions this year.
Although equities have remained somewhat buoyed by hopes that Trump’s return to office will usher in an era of looser regulations and corporate tax cuts, recently elevated bond yields have threatened the attractiveness of stocks.
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