Posted To: MBS Commentary
Stocks and bond yields don't always follow each other, but their correlation is not only undeniable so far in 2016, it's been the most important bond market motivation by far. Why now as opposed to any other time? How long will this last? Opinions vary as to why we're seeing such a strong correlation between stocks and bonds at the moment. One of the more boring explanations is that of 'asset allocation' with money managers selling stocks and buying bonds here at the beginning of a Fed tightening cycle. Less boring and probably more accurate is the notion that the current selling in stocks is big enough to make bonds stand up and take note. In other words, the big potential shift in stocks seen in the lower portion of the following chart is why the upper, shorter-term portion...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
from Mortgage News Daily http://ift.tt/1RxFgMN
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