The S&P 500 has been on a tear in 2019, rising nearly 30%, from low of the year to high it has surpassed the 30% growth mark. However, there has been a prevalent divergence between bond yields in the US and the SPX, which are correlated to move the same way. This means there could be a convergence in the near future to get back to the "regular" pattern.
Over the...
The Russell 2000 small cap index has been a prevalent lagger throughout the whole US equity rally into all-time highs. This is of concern for the health of the economy and the health of the S&P 500 index. The small-cap sector reacts the most to economic conditions and monetary policy, being the most affected if they cannot make new highs and are over 8.5% away...
US treasury yields and the S&P 500 have a positive correlation. The two usually move lockstep to a certain degree and when they diverge, they don't stay divergent for too long.
This time, however, at the beginning of 2019, the divergence occurred and has continued for nearly 12 months now.
The idea behind the correlation is that bond prices are typically...
