Homrich & Berg says rising bond yields above 5% pressure equity valuations as Fed hikes again
TLT•Homrich & Berg said Treasury yields climbed above 5% as the Fed hiked again, pressuring equity valuations. Small caps fell 5.4% in September, municipal bonds lost about 5%, and WTI crude peaked at $105 per barrel.
1. Yields and equities
Homrich & Berg flagged bond-market pressure as Treasury yields climbed above 5%, with markets pricing another Fed hike. Higher yields risk compressing equity multiples; small caps fell 5.4% in September, compared with a roughly 0.5% decline in the S&P 500.
2. Earnings and bonds
Fuel inflation emerged as an earnings headwind, with more than half of S&P 500 industries seeing third-quarter earnings-per-share growth forecasts cut. Municipal bonds fell about 5% for the month, their biggest monthly loss since 1987, amplified by thin liquidity.
3. Oil prices
WTI crude peaked at $105 per barrel mid-month and remained just above $90, raising consumer-risk concerns into the holiday season.
