1-Year Treasury Bill Or S&P 500? Charlie Bilello Asks Which Would Generate Better Returns And Gets An Interesting Result

CPI Wealth Chief Market Strategist Charlie Bilello carried out an interesting poll — what would produce a higher return over the next year? A one-year U.S. Treasury Bill or the S&P 500 total returns with dividends?

The one-year U.S. Treasury Bill currently yields over 5%, which means an investor can earn that return almost risk-free over a year.

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However, 53.9% of respondents to the poll voted for the S&P 500. That indicates investors and traders are anticipating positive moves over the course of the year that will at least produce over 5% returns.

The S&P 500 is already up by over 6% since the beginning of the year as falling inflation and optimism following the dialing-down of rate hike pace by the Federal Reserve boosted markets in the initial part of 2023. Over the last week, however, higher-than-expected inflation and strong economic data have dampened some of that optimism, causing concerns the central bank will have to stick with its rate hikes for some time to come.

Equity markets are still holding onto the gains made in January. The SPDR S&P 500 ETF Trust SPY gained 6.94% since the beginning of 2023 while the Invesco QQQ Trust Series 1 QQQ has gained over 13%.

Yield History: Bilello also pointed out that the last time the one-year Treasury yield was this high was in July 2007.

“The stock market may not be the economy but it does often drive how people feel about the economy. On that point, after the 20% rally in the S&P 500, there’s growing optimism in a “no landing” scenario where the U.S. avoids a recession altogether,” he wrote in his blog.

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