Potential benefit of owning stocks over bonds has shrunk to its lowest level in 21 years

As Treasury yields continue to march higher, the expected benefits of owning U.S. stocks over bonds is looking increasingly unattractive.

It’s just the latest milestone for the ERP, which has been shrinking all year, drawing the attention of equity analysts after more than a decade of near-irrelevance. As MarketWatch explained earlier this year, one popular method for calculating the ERP involves taking Wall Street’s projected earnings per share over the next year for the S&P 500 index companies and dividing it by the level of the index, then multiplying the quotient by 100.

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