Stocks – GRANOLAS Dividend Yield and German 10-Year Bond Yield Europe does not have the FAAMGs, but it has the GRANOLAS (Glaxosmithkline, Roche, ASML, Nestle, Novartis, Novo Nordisk, L’Oreal, LVMH, Astrazeneca, SAP and Sanofi). Image: Goldman Sachs Global Investment Research
Dow Jones Real Corporate Bond Yield The real yield on IG corporate bonds is now at its lowest since 1980. Image: BofA Global Investment Strategy
Inflation – U.S. 10-Year Bond Yields and CPI (YoY ex Food and Energy) Bond yields are low given current CPI, suggesting that the rise of inflation is temporary. Image: Richardson Wealth
ISM Manufacturing New Orders and U.S. 10-Year Bond Yield ISM Manufacturing New Orders would imply much higher bond yields. Image: Credit Suisse Research
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
Valuation – S&P 500 P/E Ratio and U.S. 10-Year Bond Yields If yields continue to rise, the price of the stock market is expected to fall. Image: Richardson Wealth
U.S. and European Equities – % of Corporates Whose Dividend Yield is Above the Corporate Bond Yield U.S. and European equities look cheap relative to corporate debt. Image: Goldman Sachs Global Investment Research
Actual vs. Predicted Change in DM Bond Yields When Regressed on PMI Level DM bond yields appear to be overpriced. Image: J.P. Morgan
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
12-Month Moving Correlation of U.S. 10-Year Bond Yields to U.S. Stocks in USD The correlation between U.S. stocks and bond yields should soon become negative. Image: BCA Research
Valuation – 10-Year Government Bond Yield (U.S. and Italy, Advanced by 3-Months) and World Equities 12-Month Forward PE (Leading Indicator) The low levels of government bond yields help to explain the world’s stock market valuation. Image: BCA Research