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Chart of the Week
Yield to Feds
The US 10-year Treasury yield surpassed 3.8% last week, marking the quickest re-rating in daily yields since 2009. Today, only ~20% of S&P 500 companies have dividend yields higher than the US 10-Year Treasury yield. With elevated rate volatility likely to persist, we believe US equity valuations may continue to face near-term pressure, and as such, deriving a greater proportion of returns from cash flows may start to look increasingly attractive.
Source: Bloomberg and Goldman Sachs Asset Management. As of August 31, 2022.