In the past or under different circumstances, a day like yesterday might not have been enough for me to write a headline like “nice while it lasted.” But if you watched yesterday’s video and read the analysis, you saw the chart showing the percent change comparison between stocks and bond PRICES (can’t look at percent change on a yield). That–along with me flat out saying it–implied we’d need a fresh supply of massive stock market drama in order to sustain further bond market improvement.
We haven’t had a fresh supply of stock market drama.
Instead, stocks have gradually been recovering from Monday’s rout, despite some bumps in the road. As such, it is time for the bond market rout to resume.
This morning was a bit deceptive, with bonds technically starting in positive territory. But keep in mind that yesterday ended on a high note for yields, so bonds were actually beginning the day on a high pivot point that they were unable to break below (2.775). It was all selling from there on out–especially after a poorly-received 10yr Treasury auction in the afternoon.
Bottom line: we’re back on the same scary ride we’d been on before Monday’s intermission.
Article source: Mortgage News Daily