Part 4/9:
Morgan pointed out that the current earnings yield of the S&P 500 has risen to approximately 4.15%, nearing the risk-free yield of the 10-year treasury at 4.28%. This increase in earnings yield suggests that stocks may represent better value than they did a few months ago, yet the risk associated with equity investments remains. The necessary balance between the earnings yield and the risk-free yield has not been satisfactorily achieved, indicating that further corrections might still be on the horizon.