Markets mixed as 10-year Treasury yield hits 7-year high

Markets were mixed on Thursday.

The S&P 500 fell 0.1 percent but the STOXX Europe 600 rose 0.7 percent and the Nikkei 225 rose 0.5 percent.

US stocks were weighed down by a rise in US Treasury yields. The 10-year yield rose 1.7 basis points to 3.109 percent, its highest level since July 2011, and the 30-year yield rose 3.1 basis points to 3.245 percent, the highest since June 2015.

Bill Kornitzer, portfolio manager at Buffalo Funds, said that as bond yields move higher, “equities will become increasingly volatile, especially since valuations are stretched and on the high side”.

However, some analysts remain sanguine.

Samantha Azzarello, global market strategist at JP Morgan Asset Management, said that the 10-year Treasury yield can get to 3.5 percent with “no trouble at all” for stocks.

Michael Yoshikami, founder and CEO of Destination Wealth Management, said that because the economy is still growing, higher rates are “OK”.

“At this point it's nothing to be concerned about, but certainly something to monitor,” he said.