Homrich & Berg says 10-year real yields at 2.4% leave stocks expensive versus bonds
SPY•Valuation gap between stocks and bonds
Homrich & Berg flagged a tougher outlook for US stocks as 10-year Treasury real yields hit 2.4%, the highest since fall 2023.
- The S&P 500 trailing earnings yield stood at 3.67%, leaving a 123-basis-point spread versus the 10-year TIPS yield, the narrowest since the tech bubble.
- The equity risk premium fell below 75% of observations since 1980, a regime historically linked to higher volatility and slower equity returns.
- In comparable low-ERP periods, median forward S&P 500 returns were 2.6% over six months and 6% over 12 months.
