LIVE MARKETS-Wall Street's yield premium to Europe is narrowing - JPM

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WALL STREET'S YIELD PREMIUM TO EUROPE IS NARROWING - JPM

U.S. stocks are yielding less compared to Europe than they used to, a note by JP Morgan shows, as companies on the old continent ramp up buybacks, a practice traditionally dominated by Wall Street firms.

According to the investment bank, the amount of European buybacks has grown by 160% to 199 billion euros over the past 10 years, outstripping U.S. buyback growth of only 75%.

"What is interesting is that when looking at the equity yield, the area of US dominance - buybacks - is narrowing, and the area where others are ahead - dividends - is widening," write JPM analysts.

European financials have taken a big step up in supporting buybacks - something JPM says may have staying power given the increased sector profitability and strong balance sheets.

Meanwhile the dividend yield gap has widened even further in Europe's favour.

"International markets always sported higher dividend yields, but if anything, the gap has widened of late,", they continue.

Now Wall Street's buyback yield of 1.8% is barely ahead of Europe's 1.4%, while on dividend yield, the U.S. is at 1.3%, less than half Europe's 3.1%.

(Lucy Raitano)

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