{"id":517957,"date":"2010-04-06T11:55:00","date_gmt":"2010-04-06T15:55:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/henry-blodget-bear-market-in-bonds-could-trigger-stock-market-melt-up-says-liz-ann-sonders-2010-4"},"modified":"2010-04-06T11:55:00","modified_gmt":"2010-04-06T15:55:00","slug":"bear-market-in-bonds-could-trigger-stock-market-melt-up-says-liz-ann-sonders","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/517957","title":{"rendered":"Bear Market In Bonds Could Trigger Stock-Market Melt-Up, Says Liz Ann Sonders"},"content":{"rendered":"<p>More from Schwab strategist Liz Ann Sonders on TechTicker:<\/p>\n<p>Rising interest rates could trigger a stampede out of the &#8220;safe&#8221; asset class.&nbsp; So where&#8217;t that money going to go?&nbsp; Into the one that has done well lately.<\/p>\n<p>\n<object width=\"584\" height=\"432\"><embed type=\"application\/x-shockwave-flash\" width=\"584\" height=\"432\" src=\"http:\/\/cosmos.bcst.yahoo.com\/up\/fop\/embedflv\/swf\/fop_wrapper.swf?id=18988185&amp;autoStart=0&amp;prepanelEnable=1&amp;infopanelEnable=1&amp;carouselEnable=0\" allowscriptaccess=\"always\"><\/embed><\/object>\n<\/p>\n<p style=\"padding-left: 30px;\"><a href=\"http:\/\/finance.yahoo.com\/tech-ticker\/bear-market-in-bonds-could-trigger-%22melt-up%22-in-stocks-sonders-says-461389.html?tickers=%5edji,%5egspc,spy,dia,%5eixic,qqqq,TBT\">Peter Gorenstein: <\/a>The <a href=\"http:\/\/finance.yahoo.com\/q?s=%5EDJI\">Dow Jones Industrial Average<\/a> is on the verge of <a href=\"http:\/\/finance.yahoo.com\/news\/Stocks-rise-after-stronger-apf-2162800942.html?x=0&amp;sec=topStories&amp;pos=main&amp;asset=&amp;ccode=\">11,000 for the first time in 18 months<\/a> on the back of Friday&#8217;s positive jobs report and Monday&#8217;s better-than-expected reports on <a href=\"http:\/\/finance.yahoo.com\/news\/Pending-home-sales-rise-82-apf-811331430.html?x=0\">pending home sales<\/a> and ISM services, a private trade group measure of the U.S. service sector.<\/p>\n<p style=\"padding-left: 30px;\">Charles Schwab&#8217;s chief investment strategist Liz Ann Sonders believes the rally isn&#8217;t over yet, even if the market loses some momentum in the near term. &#8220;I think the base case is for more of grinding higher versus the straight shot up that we saw since last March,&#8221; she tells Aaron and Henry in the accompanying clip.<\/p>\n<p style=\"padding-left: 30px;\">Sonders, who correctly <a href=\"http:\/\/finance.yahoo.com\/tech-ticker\/article\/yftt_201040\/Searching-for-a-Silver-Lining-with-Schwab%27s-Liz-Ann-Sonders?tickers=%5Edji,%5Egspc,GM,GE,FXI,SPY,DIA\">called the turn last March<\/a>, cites several reasons for optimism:<\/p>\n<ul style=\"padding-left: 30px;\">\n<li>&#8212; <strong>Investors still don&#8217;t fully believe in stocks.<\/strong> &#8220;The wall of worry is still very much intact,&#8221; she notes. That&#8217;s certainly true judging by first quarter fund flows. While investors poured more than $90 billion into bond funds, less than $3 billion went to U.S. stocks funds,<a href=\"http:\/\/online.wsj.com\/article\/SB10001424052748704300004575095951599990806.html?mod=googlenews_wsj\"> according to a Wall Street Journal story<\/a> citing Investment Company Institute data.<\/li>\n<li>&#8212; <strong>A potential bear market in bonds.<\/strong> &#8220;In the event we continue to see a tick up in the long end of the yield curve you&#8217;re going start to get some significant hits on the bond side,&#8221; Sonders says. Those losses, she thinks, could trigger a &#8220;melt-up&#8221; in equities as investors rotate out of fixed income and pour money into the waiting arms of the stock market.<\/li>\n<li style=\"padding-left: 30px;\">&#8212; <strong>Stocks are not overpriced.<\/strong> Sonders thinks the estimated 2010 earnings of $78 per share for the S&amp;P 500 is conservative. Even with those numbers and a 17 times multiple, which she thinks is fairly modest giving the low inflation rates, 1300 on the S&amp;P 500 is &#8220;not a big stretch.&#8221;<\/li>\n<\/ul>\n<p><a href=\"http:\/\/www.businessinsider.com\/henry-blodget-bear-market-in-bonds-could-trigger-stock-market-melt-up-says-liz-ann-sonders-2010-4#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/e3unctnQpuU\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>More from Schwab strategist Liz Ann Sonders on TechTicker: Rising interest rates could trigger a stampede out of the &#8220;safe&#8221; asset class.&nbsp; So where&#8217;t that money going to go?&nbsp; Into the one that has done well lately. Peter Gorenstein: The Dow Jones Industrial Average is on the verge of 11,000 for the first time in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-517957","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/517957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=517957"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/517957\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=517957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=517957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=517957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}