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."