Investors Are Leaving Stocks for the Allure of Risk-Free Payouts in Bonds
10-year yields close to the highest since 2007 has spurred what is now the biggthe biggest break in an $8 trillion equity rally that had sent the Nasdaq 100 up as much as 45% in 2023.
A valuation lens known variously as the Fed model or equity risk premium
shows the profit yield on S&P 500 shares — a rough proxy for return prospects that is the reciprocal of the price-earnings ratio — falling to its lowest level versus bond yields in nearly two decades.
Bloomberg 18 augusti 2023
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