Low US real yields power equity market rally

The US stock markets rose to record highs earlier this week, completing a V-shaped recovery from the coronavirus-induced sell-off in March. Notably, the tech-heavy Nasdaq index is now up over 30% on a year-to-date basis. 

The rally has been fueled by negative real or inflation-adjusted yields on the US government bonds, as noted by popular macro analyst Holger Zschaepitz. The 10-year real yield fell to a record lows below -1% earlier this month.