Equity Markets Shifts Focus to Earnings

The video discusses how markets are adjusting to high interest rates, focusing on the equity market's sensitivity to earnings announcements. It highlights the underperformance of rate-sensitive sectors like utilities and telecom. The discussion also covers the market's sensitivity to a 4% 10-year yield and the conditions needed for such a yield, including faster growth and higher inflation.

What is the primary focus of the equity market as interest rates rise?

• Stock buybacks

• Dividend yields

• Market volatility

• Earnings announcements

Which sector is NOT mentioned as underperforming due to interest rate sensitivity?

• Utilities

• Technology

• Telecom

• Consumer staples

What yield on the 10-year treasury is the market particularly sensitive to?

• 5%

• 2%

• 3%

• 4%

What conditions are necessary to reach a 4% yield on the 10-year treasury?

• Stable inflation and moderate growth

• Higher inflation and faster growth

• Lower inflation and slower growth

• Deflation and economic contraction

What is the effect of a 4% 10-year yield on the equity risk premium?

• It becomes unpredictable

• It returns to the long-term average

• It increases significantly

• It decreases significantly