Decoded No. 19: Stocks versus Bonds (full note, PDF)

Decoded, analysis note No. 19. Driss EFFINA, PhD. October 2026. PDF, 25 pages, 14 charts and diagrams, 12 tables.

For fifteen years, owning shares instead of government bonds paid a large and visible premium. In September 2026 the ten-year US Treasury yielded about 5 percent, the inflation-protected yield was close to 3 percent, and the S&P 500 traded on 26 times trailing earnings. A trailing earnings yield of 3.85 percent now exceeds the real bond yield by less than 1 point.

Inside the full note:

• Framework: what the equity premium is, and how to measure it
• The September 2026 snapshot
• How thin is thin? The premium in history
• 2026: a year of earnings, not of multiples
• The growth bet: what current prices assume
• Stress tests: real yields and earnings
• AI concentration in the United States
• Do bonds still hedge equities?
• Scenarios to end-2027
• Leading-indicators dashboard
• Implications for investors and for financial stability
• What to watch, October 2026 to mid-2027

Read the free preview: Stocks versus Bonds.