FYI: Falling bond yields have been a consistent theme for investors in recent months, and one that came to the fore after the rate of return on the 10 year Treasury note fell to a 21-month low this week, while falling roughly 22% this year.
Equity investors have struggled to interpret whether low yields are signalling a coming recession, or merely the anticipation that the Federal Reserve will soon cut interest rates. But one thing is clear: as the yield on government debt falls, dividend-paying stocks become more attractive.
In fact, yields have fallen so precipitously that the average dividend yield of an S&P 500 stock sits at 2.078%, versus the yield on the 10-year U.S. Treasury note at 2.094%, a difference of less than two basis points, or 0.02%. Meanwhile, more than 44% of S&P 500 stocks yield more than 10-year government bonds, according to FactSet.
Regards,
Ted
https://www.marketwatch.com/story/dividend-stocks-tempt-investors-as-bond-yields-continue-to-fall-2019-06-06/printM* Snapshot IDIVX:
https://www.morningstar.com/funds/xnas/idivx/quote.html
