A major selling point for equities since the financial crisis has been the higher yield of equities versus fixed income, with earnings considered the “yield” of a share of stock. “The simpliest way to look at this Fed Model, everything is relative. If you think about it, if bond yields go higher, they offer more of a reward”, said C. Harvey, Wells Fargo head of equity strategy. “At the margin, the buyer, the asset owner, is slighty enticed to put more money into fixed income than into equity market”.

– source Bloomberg

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