In Europe, investors looking to generate income need to turn to stocks as yields on corporate bonds continue to slide. The spread between European stock yields and yields on low-grade debt, which inverted in 2013, recently rose to the highest in favor of shares since at least 2005.
We bought a big position in Europe in the hedge fund a couple of months ago. BUY European stocks – that’s what this indicator says. A major reason for the strength in the Euro. And a good reason that US stocks have stalled. The S&P 500 yields 2% while the high yield debt is 5.70% – No inversion there, and another reason the European stock market is more favored than the American stock market.
Stocks in Europe have higher yields than their junk bonds. BUY European Stocks.