US10Y -SPX relationship is changing
On the surface yields and stocks are moving together, but recent carnage in stocks barely produced a yawn in the bond world. In recent history yields would have been plunging together with stocks, but this time there is no true flight to safety whatsoever (same story as gold in a way - but bonds where much more popular safe heaven in recent years then gold).
I was searching for possible explanations. One is that this sell off just did not produce a true panic and running for cover, which would imply that there is more to come.
The second one might be that bond market is in trouble on its own, and that some other, entirely new, source of selling emerged (China?). The latest pullback in yields looks as a shallow a-b-c sitting on support, the market being ready to resume the uptrend. Will stocks follow, or collapse?
I was searching for possible explanations. One is that this sell off just did not produce a true panic and running for cover, which would imply that there is more to come.
The second one might be that bond market is in trouble on its own, and that some other, entirely new, source of selling emerged (China?). The latest pullback in yields looks as a shallow a-b-c sitting on support, the market being ready to resume the uptrend. Will stocks follow, or collapse?
