Taking the position that the Stock Market is vunerable to rising bond interest rates Goldman issues a warning below. Martin Armstrong also has an opinion in this recent article Rising Interest Rates & The Coming Banking Crisis.  – Robert Zurrer for Money Talks

If the 10-year U.S. Treasury yield hits 4.5 percent by year-end, the economy would probably muddle through — stocks, not so much, according to Goldman Sachs Group Inc.

Goldman’s base-case scenario calls for a 10-year yield of 3.25 percent by the end of 2018, though a “stress test” out to 4.5 percent indicates such a move would cause stocks to tumble, economist Daan Struyven wrote in a note Saturday. He also said the economy would probably suffer a sharp slowdown but not a recession.

“A rise in rates to 4.5 percent by year-end would cause a 20 percent to 25 percent decline in equity prices,” the note said.

While a recent drop in stocks may have been fueled by concerns tied to the 10-year yield approaching 3 percent, many strategists have said they felt equities could continue to rise until reaching 3.5 percent or 4 percent.