The yield on 30-year U.S. Treasury bonds has risen to around 5.3%, and it is becoming a direct variable in stock market pricing rather than just a signal from the bond market. Foreign media comment that at this level, long-term U.S. Treasuries are significantly more attractive to funds seeking stable returns, while dividend stocks and high-valued growth stocks face greater comparative pressure.

5.3% yield rate raises the threshold for stocks

The report quotes the view of CNBC, host of Jim Cramer, stating that as long as long-term borrowing costs remain high, investors cannot focus solely on the fundamentals of individual companies. The reason is that when long-term U.S. Treasury bonds can offer returns of over 5%, stocks must demonstrate stronger expectations of returns in order to bear higher volatility and operational risks.

This is particularly sensitive to high-valued sectors. An increase in long-term interest rates usually compresses the valuation space for future cash flows, and technology stocks and growth stocks are more vulnerable to such impacts. At the same time, long-term government bonds have once again become an alternative to stocks.

• The winning yield in this week's auction of 30-year U.S. Treasury bonds was 5.308%.
• When yields are near multi-year highs, demand remains strong.
• More attractive to investors who prefer stable cash flows and principal preservation

Mortgage rates have risen above 7%

The impact of rising bond yields has spread from Wall Street to the real economy. Data from Mortgage News Daily shows that the average interest rate for 30-year fixed-rate mortgages in the United States has risen to 7.07%, marking the first time in over a year that it has exceeded 7%.

Rising mortgage financing costs typically suppress housing demand and further affect related industries such as construction, building materials, and home consumption. The article argues that changes in the housing market are significant because they spread to a broader economic sphere through residents' spending and corporate activities.

The Ministry of Finance's repurchase efforts did not lower long-term interest rates.

The article also mentioned that the U.S. Treasury Department recently attempted to repurchase up to $6 billion in long-term government bonds, ultimately purchasing about $5.2 billion. However, after the results were announced, the yield on 10-year U.S. Treasuries continued to rise, and long-term interest rates did not show a significant decline.

This indicates that the pressure on current long-term bond yields cannot be alleviated with a single measure. The market is still dealing with factors such as inflation stickiness, high oil prices, substantial government financing needs, and an expanding fiscal deficit. Even if the Federal Reserve future reduces short-term interest rates, long-term yields may not decline accordingly.

In this context, the 30-year U.S. Treasury bond is no longer just an indicator of concern for bond investors. For the stock market, it is becoming a higher benchmark for measuring risk-return ratios.