The Bloomberg U.S. Economic Surprise Index — which tracks the rate at which economic data beat forecasts — turned positive last week for the first time this year.
In addition, pressure on U.S. Treasury rates have helped re-established the TINA (there is no alternative) argument as the earnings yield on the S&P 500, which measures earning per share expressed as a percentage of its current shares price, now stands 3.40% higher than the 10 year treasury. (5.09% – 1.69%)
These development should be positive for stocks ahead of the third quarters earning season as the S&P 500 Index sits only a few percentage points below its all-time high.
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