Ignored amid all the excitement over the postelection market rally is that the bulls have lost a key tenet of their pro-stocks argument.
The S&P 500 through most of the seven-year bull market has seen its dividend yield stay above the rate on the benchmark 10-year Treasury yield. The thinking went that in a yield-hungry environment, it actually made more sense to own stocks than bonds.
The 10-year note's brief jump over 2.5 percent Monday morning provided a reminder that the yield argument no longer applies. The S&P 500's dividend yield is just 1.99 percent.
But fear not, stock optimists: The switch may well just be a reminder that as the market matures and economic growth accelerates, the correlation is no longer needed as an impetus to buy equities.
"It was important in getting the rally initiated," said Scotty George, chief investment strategist at Alexander Capital. "As the market really extends, the disparity and the gap between the yields on the two becomes less important than the valuation of the stocks itself."