Equity risk premium versus bonds. When stocks yield less than Treasuries, the marginal dollar has an alternative.
What to watch: Earnings yield minus 10-year real yield. It arrives continuous, and the effect typically lasts years.
It sits in tier 2 — Directional: Moves the index for days or weeks. Scheduled data releases, policy decisions, global spillovers, and the prices of money and energy. This is the tier most professional attention is spent on.
Its neighbourhood
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Dials it feeds
This factor is one input to a composite reading on the Analytics page.