The yield on the 10-year US Treasury dropping below the dividend yield on the S&P 500? That’s so last month. Today, it’s the 30-year yield that’s falling below the S&P 500’s dividend yield. At 1.966%, the 30-year Treasury yield just dropped below the dividend yield of the S&P 500 for the first time since March 2009. Who knows if we’ll finish the day with a 30-year/S&P 500 inversion, but the way things have been moving, it’s probably just a matter of time if it doesn’t happen today.
The chart below shows the spread between the 30-year and the dividend yield of the S&P 500 going back to 1977. The only other time in the last 40+ years where we have seen a similar inversion was for a few months in late 2008 through March 2009 (the low point of the Financial Crisis). In July 2016 right after the Brexit vote, the S&P 500 dividend yield came within 0.01% of the 30-year’s yield, but it couldn’t quite make it higher.
Looking at individual stocks, it’s pretty amazing how many stocks now yield more than the 5,10, and 30 year US treasuries. As of this morning, two-thirds of the stocks in the S&P 500 yield more than the 5-year, more than 62% yield more than the 10-year, and slightly more than half yield more than the 30-year. Start a two-week free trial to Bespoke Premium for more of Bespoke’s actionable equity market research.