If U.S. Bonds are the “Big Short” of the Next Decade, it Likely Means Japanese Equities are the “Big Long”
We got to thinking yesterday and came up with the chart below… It plots the ratio of the SPX vs. Nikkei against the 10 Yr UST price since 1998, when things really started going “global” with LTCM, the Russian FX…...
Despite Potential for Longer-Term Declines, 10 and 30 Yr UST Prices Approaching Near-Term Support and Could Bounce
We made the case a month ago that the secular bond bull in USTs was likely nearing its end. Since then, yields on the 10 Yr have risen 25%, as we pointed out yesterday. As the monthly charts of 10 and…
With 10 Yr Rates 25% Higher Since our Original Post, Were We Correct to Suggest on 7/17 that the Secular Bond Bull Was Nearing its End?
On July 17 we noted in a post that we believed the days of yield declines in UST securities was likely near an end. And we meant from a secular standpoint, not a cyclical one. We based this view on an…
Bond / Stock Ratio Approaching a Level that has Coincided with Equity Tops Since 2007
The chart below plots the ratio of the 10 Yr UST price vs. the SPX in the top pane and the SPX in the bottom pane. When the ratio b/t the two has approached trend-line (1) since 2007, as it is doing…
Since Credit “Leads”, What’s the Macro Message Coming From Riskier Areas of the Credit Universe?
If credit leads and equity confirms, the message riskier areas of the credit universe are currently sending is far different from the one they were sending through much of 2007 and early 2008 as they deteriorated significantly in front of equity…...
10 & 30 Yr UST Prices Continue to Battle Long-Term Resistance; Analog to Japan Suggests Days of Yield Declines Near an End
The first charts below include 10 and 30 Yr UST prices. With their strong recent performance, both securities are battling long-term channel resistance dating back 27 years. Historically, per the red shades, this resistance has resulted in periods of declining…...
Ratio of 10 Yr vs. 30 Yr UST Price at an Important Juncture for Future Direction of Equities
The attached shows that the ratio of the 10 Yr vs. 30 Yr UST price is hitting trend-line support that has been in place since 1986. The first point to make is that it is typically at this line where 10…...
Which One has the Correct Macro View?
Bonds or stocks? One of these is going to have egg on its face when this is all over. Longer-term, the 10 Yr UST is suggesting the fair value on the SPX is < 700. Is the 10 Yr UST correct or is…...