Stocks And Bonds: Best Friends Forever?
Andrew Thrasher | May 02, 2013 11:14AM ET
It’s interesting the way different markets relate to one another. Typically Treasury bonds aren’t the best friends of stocks, moving in opposite directions most of the time. There have of course been periods of time where the two have worked out their differences and advanced or declined with one another. When this happens we begin to notice a divergence that takes place between yield and equities. Since mid-March yields have been falling while stocks continue to head higher. Bonds are often considered the ‘smarter asset’ compared to stocks and when yield isn’t mirroring the move in risky asset classes it typically raises a red flag for stocks. However, this hasn’t been the case so far this year.
The Outperformer
Even though stocks have been hitting new highs, it has been bond prices that have been the outperformer over the last couple of months. One note regarding this couple is the momentum between the relationship of the S&P 500 (Disclosure page for full disclaimer. Connect with Andrew on Google+, Twitter, and StockTwits.
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