Valuation – World Technology 12-Month Forward Earnings Yield and 10-Year Treasury Bond Yield Plus 2.5 Tech stocks are less attractive, as the world tech 12-month forward earnings yield is still below the 10-year Treasury bond yield plus 2.5. Image: BCA Research
MSCI World and World Technology 12-Month Forward Earnings Yield Minus U.S. 10-Year Bond Yield Over the last 4 years, the MSCI World tended to decline when the yield gap was close to 2%. Image: Societe Generale Cross Asset Research
Equity Risk Premium – S&P 500 Cyclically-Adjusted Earnings Yield and 10-Year Treasury Yield The equity risk premium suggests that U.S. equities remain attractive relative to bonds. Image: Alpine Macro
S&P 500 Index Real Earnings Yield S&P 500 real earnings yield nears post-crisis low. Image: Morgan Stanley Wealth Management
S&P 500 Equity Risk Premium – Consensus Bottoms Up Earnings Yield – 10-Year Treasury Yield As low real yields are driving investors to equities, could stocks continue to rise if the equity risk premium falls to 3%? Image: Morgan Stanley Research
S&P 500 Forward Earnings Yield and 10-Year U.S. Treasury Yield The S&P 500 forward earnings yield looks attractive vs. the 10-year U.S. Treasury yield, but equity risk does not disappear. Image: The Wall Street Journal
Gap Between S&P 500 Earnings Yield and U.S. Treasury Yield This chart suggests that the S&P 500 looks attractive relative to bonds, as the spread between the S&P 500 earnings yield and the U.S. 10-year Treasury yield is 368bps. Image: Goldman Sachs Global Investment Research
Equity Risk Premium (ERP) – S&P 500 Earnings Yield Minus 10-Year Treasury Yield Chart suggesting that the S&P 500 looks attractive relative to bonds. Image: SunTrust Private Wealth Management
Real Yield on U.S. Corporate Bond IG & HY vs. Equity Earnings Yield Real yields on U.S. corporate bonds (IG & HY) exceed equity earnings yield Image: Gavekal, Macrobond
S&P 500 Earnings Yield Less 10-Year U.S. Treasury Yield Goldman Sachs expects the yield gap will narrow to 395 bp by the end of the year. Image: Goldman Sachs Global Investment Research