The equity risk premium on the S&P 500, which measures the attractiveness of stocks over bonds, has reached its lowest point in 22 years and is now at a negative level, the lowest since 2002. This decline in premium indicates that the earnings yield of the S&P 500 is now less appealing compared to the yield of 10-year Treasury bonds. Additionally, the spread between the S&P 500's forward and trailing price-to-earnings ratios has widened to four points. This situation reflects a broader trend where the differential between expected returns on stocks and bonds is deeply negative, a condition not seen since the early 2000s.
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The US Equity risk premium has reached its lowest (negative) level since 2002, making the S&P 500 the least attractive compared to bonds in 22 years https://t.co/8xqJlPGj3W
"The equity risk premium for US equities — a measure of the differential between stocks and bonds’ expected returns — is now deep in negative territory, something that hasn’t happened since early 2000s." @Bloomberg https://t.co/PrtxBUcrkV
4-point spread has opened between S&P 500’s forward (blue) and trailing (orange) P/E ratios https://t.co/usF4Ys19oC
Spread between S&P 500 earnings yield and 10y Treasury yield has continued to move lower this year and is hovering near lowest since 2002 https://t.co/DE8Y7Y5aWp
Equity Risk Premium (the benefit of owning stocks over treasuries) has fallen to its lowest level in 22 years https://t.co/gmWQyoNiGy
US Equity risk premium is at its lowest level in 22 years The S&P 500’s earnings yield is unattractive compared to bond yield https://t.co/r5pj3snGdm
The equity risk premium on the S&P 500--the gap between the earnings yield and that of 10-year Treasurys--has hit a 22 year low https://t.co/eauFlWdtoa
Trades at the narrowest spread to the S&P 500 on 2 year forward numbers (excluding the weirdness in 2021 when it was over earning and S&P was under earning) since 2017 despite the best forward growth profile since 2017. https://t.co/2xdRxclNWr