If EPS estimates are cut and the bond yield rises, stock valuations will become less attractive.

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At current levels, the stock is yielding around 2.30% and that yield rises which each leg down in the share price.

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Which is another way of saying that the yield rises.

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There is, for a start, the risk that the yield on Treasuries rises, perhaps sharply.

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Bonds are like seesaws: The yield falls as the price rises.

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So when the price of US government debt rises and the yield on that debt falls, that typically means investors believe prospects for the global economy have deteriorated.

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If inflation rises, the low yield could cause you to lose money on an inflation-adjusted basis.

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Unfortunately, however, as a stock's price rises, its dividend yield falls (assuming the payout doesn't go up as much as the stock's gain).

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As its yield falls the value of the bond rises.

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Corporate-bond investors want assets that are least sensitive to rate rises, and shorter-dated high-yield bonds are the sweet spot, he said.

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Brazilian fixed income debt may be attractive in raw yield terms, and yet the specter of more rate rises is a worry.

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