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By Nicholas
Jasinski | Tuesday, August 3 Paltry
Yields. The S&P
500 advanced 0.8% today, to notch its 42nd
record close of 2021. The index is up nearly 18% since the start of the year,
after rising 16% in 2020 and 29% in 2019. The 10-year
U.S. Treasury yield fell as low as 1.15% today, before
recovering to 1.17% by the afternoon. Lower bond yields make stocks
relatively more attractive. The S&P 500's dividend yield of about 1.3%
may be the lowest it has been in two decades, but it's still higher than the
10-year's yield. "Before
the bull market of the 1990s, the S&P 500 yielded 3% or more and topped
6% at a market low in 1982," Barron's Andrew Bary recently
wrote. "That occurred during a period of higher interest
rates than those prevailing now." From 2003 to
early 2020, the S&P 500 mostly yielded close to 2%. Today's
bond yields don't provide much competition. Read more from Andrew here. Meanwhile, a
particularly strong earnings season carries on. Second-quarter S&P 500 earnings
per share are on track to be up 83% from a year ago. Companies have been
beating by 16% on average, according to data from Credit
Suisse's chief U.S. equity
strategist Jonathan Golub. Results
reported today came from Alibaba, Lyft,
Nikola,
Clorox,
Eli
Lilly, Akamai
Technologies, Ralph
Lauren, and more. The Dow
Jones Industrial Average finished up 0.8%, within a tenth of a
percentage point of its all-time high. The Nasdaq Composite gained 0.5%, and is about half a point away
from a record. |
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DJIA:
+0.80% to 35,116.40 The Hot
Stock: Moderna +11.5% Best Sector:
Energy +1.7%
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