For the better part of the decade, extremely low yields on “risk-free” Treasuries made “riskier” asset classes like equities more attractive. That attractiveness is finally beginning to fade as Treasury yields across the curve tick higher. As shown in the two charts below, at this point the yields on the 10-Year, 5-Year, AND 2-Year Treasury Notes are above the dividend yield of the S&P 500. Only the 3-Month T-Bill yields less than the S&P 500’s dividend yield at this point. The last time the 10, 5, and 2-Year Treasury yields were all higher than the dividend yield of the S&P 500 was ten years ago back in mid-2008.
To read more about this topic, start a 2-week free trial to any membership level and pull up last Friday’s Bespoke Report newsletter. The start to the trading week is an excellent time to start a two-week free trial!