Equity Risk Premium Nears Historic Low as Treasury Yields Rise
1 report, 1 independent
Updated Oct 11
AI-generated briefing. Brind wrote this from the reports listed below and has updated it as the story developed. It can be wrong. Each section says how much you can rely on it, and the sources are linked so you can check.
What happened
According to a report, the 10-year Treasury closed at 5.31% on Monday, offering a risk-free return that has not been matched by stocks since 2002. At the record close of 7,818.93 on Tuesday, the S&P 500 traded at an earnings yield of roughly 3.7%. This means the index currently yields about 1.6 percentage points less than a government bond.
From zerohedge.com
Why it matters
The report states that the equity risk premium—the extra return investors demand for owning stocks over bonds—is at one of its thinnest levels in a generation. Historically, this spread has rarely been this low, with the last similar period being around 2002.
From zerohedge.com
Who's involved
- FactSetProvides financial data and analysis on market valuations