The Ten-Year Treasury Drops Below 3%

There’s not much to add that this chart doesn’t already say:

The yield on the ten-year Treasury (^TNX) has fallen below 3% which it hasn’t done since the height of the financial crisis (roughly, November of 2008 to April 2009).
The Dow is at 9900. I ran the numbers and found that the Dow currently yields 2.9%. Assuming the overall dividend number isn’t cut, the Dow needs to gain, on average, 10 points a year for the next 10 years to match what the 10-year is offering.
Either stocks are very cheap or Treasuries are way too expensive (or possibly both). As I’ve said before, the 10-year Treasury has a major impact on stock prices.

Posted by Eddy Elfenbein on June 29th, 2010 at 10:07 am

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