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True FCF yield vs earnings yield gap widened 1.4% in 2026 as CapEx and SBC ballooned across the S&P 500. Combined with the -1.11% earnings-to-treasury spread, the real equity risk premium looks like it's arou -2.5%. Historical comparisons to 1987, 1992, 2000, 2008.
Standard equity risk premium analysis compares the S&P 500 earnings yield (inverse of CAPE or forward P/E) against the 10-year treasury yield. That comparison is useful but it uses GAAP net income as the numerator, which includes items that don't …