As 10-year Treasury yields hit seven-year highs, the question many investors are asking is whether they should cheer it as a sign of economic vigor or brace for higher rates making equities a pariah. The S&P 500’s annual profits are currently about 4.8 percent of the index’s value. While not everyone is in love with the comparison, many investors feel safe when that number is comfortably above the yield on the 10-year note -- which it is, by about 1.7 percentage points. Still, the rise in bond yields has narrowed the gap by about 40 basis points since the start of the year.
Source: Bloomberg Pro Terminal
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