[Société Générale: 10-Year U.S. Treasury Yield at 5.5% is a Critical Threshold, Breach Could Pressure Stock Valuations] Odaily Planet Daily News – Alain Bokobza, Global Head of Asset Allocation at Société Générale, stated that a 10-year U.S. Treasury yield of 5.5% is a critical threshold. Higher borrowing costs would surpass earnings growth and begin to pressure stock valuations. Bokobza noted that this year’s significant upward revisions in global earnings expectations have prevented the equity risk premium from collapsing, even as yields rise. He said: 'Currently, stocks are not more expensive than they were at the start of the year, but a 5.5% yield level would mark the threshold where earnings upgrades are no longer sufficient to support valuations, meaning stocks would start to feel the impact.' He expects the upcoming rate hikes by the Federal Reserve and the European Central Bank to be moderate, unlikely to be aggressive enough to disrupt the current economic cycle or quell inflation concerns. Last week, Grace Peters of JPMorgan stated that a 10-year U.S. Treasury yield reaching 5% would carry significant psychological weight and could trigger a stress reaction in the stock market. Similarly, Emmanuel Cau of Barclays believes that a rise to 5% would heighten investor concerns about the impact on equities. (Jin10)