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S&P 500 could fall below 2,500 if the 10-year Treasury yield crosses 3.0%

“Assuming the risk premium remained unchanged, the S&P 500 should fall to 2,509 when the 10-year yield rose to 3.00%, as the chart below shows” writes Sunny Oh for marketwatch.com. See: Two reasons why you should steer clear of U.S. stocks right now: SocGen Much of their math revolves around the equity risk premium.Based on their analysis, a 10-year Treasury note yield TMUBMUSD10Y, -0.98% at 3.00% could knock the S&P 500 SPX, +0.34% to 2,500, a 14.5% drop from its all-time high of 2,873 from Jan. 26.To be sure, the equity risk premium isn’t a foolproof method for predicting the path of the stock market.On the other hand, a high risk premium suggests stock investors can look forward to richer returns ahead.
 
Source: marketwatch.com



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