Bonds: Yields challenge equity valuations – BBH
Brown Brothers Harriman’s Elias Haddad notes that rising global bond yields, driven by a rebound in Oil prices and uncertainty around US-Iran talks, are making Treasuries more attractive than equities. The S&P500 earnings yield has fallen below the 10-year Treasury yield, leaving equity valuations harder to justify and supporting a relative shift toward bonds.
Rising yields favor fixed income
"The rebound in crude oil prices is pushing global bond yields higher as the path to US-Iran talks remains uncertain."
"Meanwhile, the renewed bond market selloff is leaving equity valuations harder to justify."
"The S&P500 current earnings yield has fallen further below the 10-year Treasury yield, making Treasuries increasingly attractive relative to stocks."
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