Bloomberg Intelligence's 'Equity Market Minute' 11/13/2019

Gina Martin Adams from Bloomberg Intelligence discusses the impact of rising 10-year Treasury rates on dividend-yielding stocks in the S&P 500. She highlights that not all dividend stocks will underperform as rates rise, emphasizing the importance of beta over dividend yield. The analysis shows that high dividend yielders have similar beta to low yielders, suggesting rate impacts will vary by sector. The utilities sector's performance is closely tied to Treasury yields, and its recent underperformance is noted. Investors are advised to monitor both beta and yield as rates may continue to adjust.

What is the primary concern for investors as 10-year Treasury rates rise?

• The effect on dividend-yielding stocks in the S&P 500

• The performance of international markets

• The impact on technology stocks

• The stability of the real estate market

According to the analysis, what factor is more significant than dividend yield in determining stock performance?

• Beta

• Market capitalization

• Revenue growth

• Price-to-earnings ratio

What does the graph reveal about high dividend-yielding stocks in the S&P 500?

• They have about the same beta as low dividend yielders

• They are mostly low beta stocks

• They are primarily in the technology sector

• They have a higher beta than low dividend yielders

Which sectors are likely to be most affected by rising rates according to the analysis?

• Low beta industries

• High beta industries

• Technology sectors

• Healthcare sectors

How is the utilities sector's performance related to the 10-year Treasury yield?

• It is closely correlated

• It is only correlated during economic downturns

• It is inversely correlated

• It is not correlated