Why the Risk to Bonds are Even Higher

A year of profit stagnation has left the S&P 500 Index’s price-earnings ratio flirting with some of its highest readings since the Internet bubble. Judged against bonds, though, stocks remain stubbornly cheap. Plotting the index’s per-share earnings against the yield on the 10-year Treasury note, a technique sometimes referred to as the Fed Model, shows the S&P 500 is still less expensive than any time during the 2002 to 2007 bull market. Stock valuations are held down in the comparison by some of the lowest bond payouts ever. State Street Global Markets Global Head of Macro Strategy Michael Metcalfe discusses with Bloomberg's Francine Lacqua on "The Pulse."

Active Investing Strikes Back Through Bond Mangers
26:57 - Bloomberg Intelligence's Eric Balchunas and Bloomberg's Julie Hyman look at the shift between active and passive investing, and how bond managers are bucking the trend. They speak on "Bloomberg Markets." (Source: Bloomberg)
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