Reading it. The implied equity risk premium is the extra return the S&P 500 is priced to deliver over the 10-year Treasury, backed out of today's index level, the cash companies return to shareholders (dividends and buybacks), analysts' earnings growth for the next two years fading to the 10-year rate, and a terminal value. The model and monthly estimates are Professor Aswath Damodaran's (NYU Stern), whose published number Pinebrook reproduces exactly. Between his monthly updates, Pinebrook re-solves his model every trading day, and live during market hours, with the current S&P 500 (his index level moved by SPY's price change) and the current 10-year yield (the last Treasury close, moved intraday by the 7-10 year Treasury ETF IEF; typical error about 1 bp). A lower premium means stocks are priced for less reward per unit of risk. Source: Damodaran Online.