Credit Markets Signal Warning for a Relentless Equity Rally
(Bloomberg) -- US bond markets are signaling that equity bulls may be a little too exuberant now. Stocks are close to the most overvalued against corporate credit and Treasuries in about two decades. The earnings yield on S&P 500 shares, the inverse of the price-earnings ratio, is at its lowest level compared with Treasury yields since 2002, signaling that equities are at their most expensive relative to fixed income in decades. For company debt, the S&P 500’s earnings yield, at 3.7%, is close t