Times are changing for equity valuations
Roger Montgomery provides this summation of why rising bond yields resulted in volatility in equity valuations. "If a picture tells a thousand words then the picture being painted by these graphs is a gloomy one for those fully invested or those levered into recent asset purchases. Rising interest rates on long bonds, means the incentive to be in risky assets is lower. Rising long rates also means that discount rates to value assets must rise as well. Higher discount rates means lower valuations. It’s less important that rates are back where they were in December 2014, than whether market sentiment towards the direction of future rates has changed. How quickly the tide can turn! And note there has been no catalyst."