Key points:
The rise in bond yields has left shares offering a low risk premium over bonds leaving them at risk of more softness.
The conflict in Israel has added to the risk, although the threat should be minimal if Iran is not drawn in avoiding a severe impact on oil supplies.
These are parallels with the run up in bond yields prior to the 1987 crash but relative valuations are less threatening.
Still falling inflation should take pressure off central banks next year, which should in turn be positive for shares.
Read full article here.