Russ Mould of A J Bell points out that supposedly risk-free 10-year gilts and corresponding instruments have risen despite interest rate cuts from central banks. At the same time, equities have been generally strong. In the US, the 10-year Treasury is now equal to the earnings yield on the S&P 500. Investors might be taking the extra risk anticipating upside potential but it could be seen as an early warning sign. In the UK, the earnings yield is double the 10-year gilt yield, making the domestic market look cheap, explaining all the takeover activity.

Guests: Russ Mould

Published: Thu 21 November 2024