This is the first time since 2000 that Treasury Bills are yielding higher than the S&P 500 earnings yield
Even during the 2008 Financial Crisis, cash never yielded higher than S&P 500 earnings. And the gap between the SP500 earnings yield and cash is widening. Competition from cash and bond yields versus stocks keeps rising. For a USD-reference account investor, here's the median Return by Asset Class: 1. High Yield Savings Accounts: 5.5% 2. 6-Month Treasury Bill Yield: 5.0% 3. Investment Property Cap Rate: 4.5% 4. S&P 500 Earnings Yield: 4.2% Bottomm-line: Cash and Treasury Bills are now paying a HIGHER yield than real estate and the S&P 500. In other words, risky assets are paying less than risk-free assets, i.e taking a risk is compensated LESS than just holding cash. Source: The Kobeissi Letter
Below a chart of stocks $SPY (S&P 500) vs. bonds $TLT (iShares 20y+ US Treasuries), just as a reminder of the persistence and longevity of this relative trend
Source: David Keller
Through FY24 to FY27, Nvidia $NVDA is projected to generate a total of $342B in revenue
That forecasted total is more than double Nvidia’s lifetime revenues of $160.3B through the end of FY23. Source: Beth Kindig
The relative Nasdaq 100 bull does not care about no rates moving higher...
Source: TME, Goldman Sachs
LVMH vs Novo Nordisk gap is getting extreme. Is there cross asset logic here, or is it just hot money switching from one ex hot asset to another "must have" asset?
Source: TME, Refinitiv
Moderna's stock is now down 81% from its peak and below the price it was trading at when the FDA issued an EUA for its Covid-19 vaccine back in December 2020
$MRNA Source: Charlie Bilello
Wondering why high interest rates hasn't hurt sp500 performance so far?
Just have a look at the chart below courtesy of Linas Beliūnas. The S&P 500 heavy weights are full of cash and have been benefiting from the higher yield paid on short-term deposits. E,g Apple is making $1 billion on their cash holdings doing absolutely nothing...
Nobody can predict at the moment how the Middle East situation will unfold, but if history is a guide market impacts of geopolitical scares are usually short lived
Will it be different this time? Source: Michel A.Arouet
