Don’t Ignore What Bonds Are Saying Right Now
Phoenix Capital Research | Mar 18, 2019 08:55AM ET
While stocks continue to push higher, the bond market is quietly preparing for disaster.
The yield on the 10-Year US Treasury has collapsed to within spitting distance of the December lows. For those with short-term memory issues, that was when investors were piling into Treasuries while stocks were in complete meltdown mode.
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Here’s the weekly chart for the 10-Year Treasury yield (black line) overlaid with the S&P 500 (blue line). As you can see, bonds aren’t buying this rally in stocks, at all.
Put simply, Bonds are showing us that economic growth is GONE in the US. Against this backdrop, stocks are rallying on hopes that the Federal Reserve will start easing monetary policy.
This is an EXTREMELY dangerous situation.
Combined with the fact the long-term stock market charts shows that it’s been rejected at its former bull market trendline, this tells us the bull market is OVER.
What comes next, won’t be pretty.
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